Understanding credit card payments, rewards, debts, debts and interest can provide a major boost and security to your financial well-being and in the sections listed below, I’ll perform a deep dive into these topics in simple and clear terms. A Basic Definition Of Credit & Debit Cards
Basic Definitions of Credit and Debit Cards
Debit cards: A debit card is a plastic or metallic card that allows you to spend money that’s yours.
- Credit cards: These are also plastic/metallic cards that you borrow and have to repay within a set time.
Getting Out Of Credit Card Debt
Having a payment strategy keeps you in control of your financial situation
- Paying high-interest cards first
- Automate specific amounts
- Make multiple payments each month
- Negotiate with your creditors
- Consider debt consolidation
- Review your spending, avoid more debts & if available fall on your savings
What’s your opinion
Management of money is a skill that is critical to financial sufficiency
Why People Get Credit Cards
Building credit
- Credit card debts are not always bad for you
- A credit score is a number that rates your credit risk
- Having a high score can make it easier for you to get a loan, rent an apartment, or lower your insurance rate
- Emergencies: If you need to buy something and you don’t have the cash on hand.
- Rewards: With a credit card you can get cash back on your purchases, airline points, discounts, coupons and more
- Convenience: Most credit cards can be used internationally and online, whereas cash and bank cards cannot
- Safety: If your debit card is used fraudulently, the money is missing from your account instantly, by contrast, when your credit card is not used you are not out of money
How to Avoid Piling Credit card Debts
Read the fine print
- Avoid cash advances
- Negotiate a lower interest
- The better your credit card score, the lower interest you should have to pay
- Stay on a budget
- Monitor your payments
- Link a bank account and turn on autopay
- Have backup savings or investments
