Credit cards are present in the lives of many Spaniards since they turned eighteen. Many have looked forward to it and once they get it, they start using it for everything, which ends in a negative experience.
If you are looking for your first credit card, you should be clear about how it works and take into account some tips to put it to good use. This way your card will fulfill its most important function: to help you build a good financial history. And you will stay away from problems and unnecessary debts. To start becoming a good user, consider this guide:
Identify the basics
As soon as you get your credit card or even before, you should be familiar with the basics that will help you manage it. Among them, some of the most important are the cut-off date, which refers to the last day in which the consumptions for your next billing are counted. There is also the payment date, as the name says, the last day you have to cancel your monthly fee. In addition, credit line, membership fee, cash provision, among others.
If you don’t know them yet, don’t forget to visit our credit card glossary for beginners.
Plan your purchases according to your cutoff date
This is a basic point that will help you have more time to cancel your purchases. If you accommodate your expenses according to your cut-off date, you can enjoy up to a month and a half to cancel the money spent. If the cut is made on the 25th of each month and your payment date is the 1st of each month, you know that, if you schedule a purchase for the 27th, you will have many more days, allowing you to make better use of your money.
The advice is that you arrange your dates on a calendar and keep them in mind before making any significant expenses.
Do not use more than 30% of your credit line
This is usually a fairly debatable point, but the truth is that it is important to demonstrate to financial institutions that you do not depend on your card to finance your life. If you normally spend only 30% it means that you have control, but if you surpass every month and are at your limit, using 70%, 80% or 90%, you show that your income is not enough and that you are in need of using it constantly. This is not something that contributes positively to your financial profile.
Take advantage of the benefits of your card
The idea of having a credit card is to use it primarily to earn something else: earn miles, get bonuses, purchase returns, discounts, etc. Then, before accessing a card, you must first investigate what the benefits are and, once you have it, use them! It does not mean that you will buy or spend for no reason, just to take advantage of them, but that every time you have to make an expense, you will consider whether the points or accumulated can help you in some way.
Use automatic payment to eliminate membership
Be clear that all cards request a membership fee, but they also give you some chance to eliminate that charge; for example, that you consume a certain amount per month or an annual average. One way to eliminate that cost without having to spend too much is to enroll your card to the automatic payment of certain services that you will still pay month after month, such as Netflix, Spotify, the payment of your ADSL. In this way, you will not be spending anything extra and eliminate the cost.
Of course, you should check that the accumulated amounts are those necessary to eliminate the membership payment.
Set a minimum to use your card
One of the reasons why many fall into debt with their plastics is because they end up using them for everything, even minimal purchases. So, an ideal tool is that you put a limit amount to use your card, for example, you will not use it unless the amount to be paid exceeds 50 soles. From there, you will be allowed to use it. If you like it a lot, you can round it to 30 or 40, or the amount you want, but the idea is that you are aware that the same money will have to be returned, and sometimes, using the cash is what helps us to see how it It affects our budget.
Use these tips and if you still do not decide which card is for you, do not forget to compare each of the options.