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Using Credit Cards Wisely

There’s a lot of responsibility that comes with owning a credit card. On one hand, those handy plastic cards make spending more convenient. On the other hand, they can lead to serious overspending. They can help you build credit fast. Or, they can blow your credit score. Ultimately, the outcome of owning a credit card is solely up to you. So, follow these simple tips to use your credit cards wisely:

Pay On Time Every Month

Your credit card payment history makes up 35% of your credit score. And your credit score affects your ability to do things like take out a loan, get a low-interest rate, rent an apartment, get a job and a whole lot more. Plus, late payments incur late fees, which then increases the amount of money you owe. The bottom line? Pay on time. Every time.

Pay In Full When You Can

It’s great to make your payments on time. It’s even better to pay off your credit card debt. Here are two great reasons to pay your debt in full when you can. First, you avoid incurring interest charges on your purchases. Second, you build credit fast. And those two reasons lead to the best benefit of all: the peace of mind that comes from being credit card debt-free.

Maximize Your Rewards

Aside from building credit, (which is the main reason to use a credit card wisely,) credit cards offer you a range of benefits that can improve your life. From cash back to shopping discounts to travel points, credit card rewards run the gamut. Make sure to use the cards that give you the biggest bang for your buck. Pick the one with the most cash back. Or choose the card that earns you the most miles. Then, get rid of the rest.

Use the 20/10 Rule

Follow these steps to protect yourself from spiralling debt:

  • Start with your annual gross income
  • Calculate how much you bring in after taxes
  • Multiply that after-tax number by 20%
  • Never borrow more than the 20% number
  • Pay less than 10% of your monthly after-tax income towards debt

Simple, right? Stick to the plan by tracking your purchases. Skip those impulse buys. And save cash for big-ticket items instead of putting the purchase on a credit card.

Limit the Number of Credit Cards You Own

Owning a lot of credit cards can land you in debt in a hurry. Lenders think so too, which is why owning a lot of credit cards ultimately hurts your credit score. Lenders see you as a debt risk. Keep things lean. Limit yourself to a few cards. Pick the ones with the lowest rates and the fewest fees. Your credit score – and your cash flow – will thank you.

Don’t Exceed Your Credit Limit

This one’s a no-brainer. Don’t spend more than your credit card will allow. If you do, brace yourself for the fallout. Think penalty fees, over-the-limit fees, raised interest rates, lower credit score, cancelled credit cards, and more.

Online Payday Loans

If you’ve maxed out your credit cards or want to avoid putting a particular expense on plastic, consider applying for a payday loan with Speedy Cash Canada. Our Online Lending team can help get you the cash you need the day you need it. Applying is easy, fast and hassle-free. Plus – we won’t check your credit.

Apply today!