Credit cards could be a blessing or a demon fresh out of hell. Everything will depend on the use I give it and this is important to learn from the moment I have my credit card for the first time. Credit cards have their advantages and disadvantages, but what is certain is that they are not for everyone! And of course: not all cards are the same. The cards are not that difficult to handle. The tricky thing is managing the emotions that cause them to be abused.
How to use a credit card for the first time?: The cost
First of all, you must always keep in mind that a credit card is NOT money, it is not a subsidy, it is not a gift … it is a credit and that sooner or later I must pay … with more or less interest, depending on its use and characteristics, not counting the costs involved in its possession.
It is important that when acquiring a card you are always clear about all the costs related to it. These costs are: the cost of maintenance, the interest rate, late fees, commissions, fees for ATM withdrawals,
How to use a credit card for the first time ?: Payment and cut-off dates
This is key to the proper use of your card:
- The cut-off date is the one on which the bank “ends” that month.
- The payment date is the day that the bank gives you as a limit to pay your balance.
For example: if my cut-off or closing date is the 22nd of the month, purchases after that day are payable for the next month.
If my payment date is the 4th of the month … Everything I pay that day does not generate interest … That is, if I calculate the dates correctly, I can enjoy a few days of free credit.
Buying a few days after the cut gives more days of free financing. This is more interesting to use for large purchases.
How to use a credit card for the first time ?: Dangers and temptations
It is the point where you must not succumb.
I get the payment schedule and I have to pay 350,000 but it is not enough for what I pay only 200,000… I have an unpaid balance of 150,000 but to this I must add the interest for the month… ..and if I continue using the same amount, for next month it will be the same and the amount that I will leave pending will be much higher… and in 6 months… unpayable….
What would be the solution … pay the total amount spent each month and if a month is not enough, then I keep the card very hidden and do not use it until it reaches zero debt … .. and there I propose to keep it no higher than what I can actually cancel in the month.