When we have a credit card suited to our needs, we can use it to cover various expenses during the first months of the year (generally, the most difficult).
However, it is necessary to know the most efficient way to use this financial instrument, in order not to incur debts. So, we share these tips to give you the best use of your credit card this year.
Know your debt capacity
A line of credit is not extra money, it is money that must be paid sooner or later. Therefore, you must know the limit amount you can pay month to month.
Experts recommend not allocate more than 20% or 30% of total income. That is, if you have an income of 10 thousand dollars, your monthly payments should not be higher than 2 thousand or 3 thousand dollars.
In this way, you will not compromise the budget for your daily expenses such as food, transportation, rent, services (water, gas, electricity, etc.), tuition, among others.
Another recommendation that can help you define the limit amount of your debts and have a good credit history is not to occupy more than 50% of your line of credit. But beware of increasing your line of credit, this will only complicate the management of your payments.
Check the interest rate of your card
One of the main characteristics of credit cards in Mexico is that, for the most part, their interest rates are very high.
Therefore, you should always know the interest rate of your card or in other words the cost of your credit. That is, depending on the interest rate will increase your amount to pay.
If you think that at some point you will not be able to liquidate the debt of your credit card, look for a card that offers a low interest rate.
If you are responsible with payment of your monthly payments, do not worry about the interest rate. In that case, identify any card that rewards you for using it. But, of course, never forget the amount of the interest rate, in case an event happens.
Plan your purchases for months without interest
After knowing your ability to pay and be cautious with the interest rate, the key to not get into debt is to plan each purchase you are going to make with a card. Try to use the months without interest only for things that are worthwhile and lasting after paying them. An example is household appliances, computer equipment, even trips, if you make them after paying.
Another way to improve your cash flow and take advantage of your card in the first months of the year is to pay in advance. If you use a credit card, you can pay 3, 6 or 12 months without interest and get discounts, for example, on the property. You can also take advantage to pay the “endorsement” of the holding to months without interest.
Use card after cut date
If you use your credit card after the cut-off date, you will have about 50 days to pay. The cutoff date is nothing other than the sum that the bank makes of all the expenses you made in the month, to assign a payment date. Thus, you can take advantage of all that time to save and pay on time.
Pay on time and more than the minimum
Never leave your payment dates neglected or pay less than the minimum. Try to pay two days before, otherwise, your debts could multiply quickly, since interest and commissions are charged for non-payment. Check the Condusef’s minimum payment calculator so you can get an idea of how much your debt can grow.
Credit cards help to pay off larger expenses little by little. The main keys for a good use of your card are: know your debt capacity, plan your purchases and pay your debts on time in 2019.