8 Finance Tips from Cobalt Advisors for Managing Your Credit Card Responsibly

When you first get a credit card it can be very tempting to rush to the stores and spend.

Used responsibly, a credit card can be a very helpful financial tool.

Your Credit is a lot like your health, to keep it in good condition you want to take care of it and minimize risk, watch for warning signs and make responsible decisions. Should you struggle with your debt, you can follow the easy steps below or contact Cobalt Advisors who will assist you in managing your credit responsibly.

1. Take advantage of all the Rewards you can says Cobalt Advisors

The people that have the most to gain from credit cards are the ones that master the art of credit card rewards. Many credit card companies offer great rewards on refilling with fuel all the way through to groceries. Keep track of what rewards your credit company offers.

2. Pay off your balance every month

To avoid paying interest on your credit card purchases, pay the full balance due on every billing cycle. Keeping a good credit score as well as cutting out the interest loaded on credit card purchases.

3. Never skip a Payment

Pay your bill every month, even if it is only the minimum installment and not the full amount. Missing a payment could result in a late fee, penalty interest (which is more than usual interest) and a negative impact on your credit.

4. Track your spending

It is vital that you keep track of your spending. Track how much and where you spend. This way you will be less likely to overdraw your account.

This will also be great when filing your tax return.

5. Keep your debt level low

While there are a few big things you need to borrow for like a home, car or education. It is important you borrow only for what you really need. Try to ensure that your debt repayments are not more than 36% of your monthly income. This will ensure a better credit score.

6. Prioritize needs over wants

The easiest way to stay on top of your credit card bill and budget is to use the card for your needs and not wants. It is very easy to fall into the trap of using your credit card as a debit card. This usually happens when you lose track of your spending, and you end up spending more than you can afford to pay back at the end of the month. 

7. Don’t open to many credit cards on your name

You will notice that once you have opened your first credit card account you will receive countless offers in the mail. Some of these companies will offer you 0% interest for the first couple of months. It is smart to ignore most of these offers. Opening too many credit cards on your name could be a red flag for credit bureaus. 

8. Basic steps to avoid credit card fraud

It is very important to make yourself familiar with the below tips to avoid credit card fraud. 

• Only use the chip and not the strip on the card
• Never share your card number in public or the 3 digit number located on the back of the card.
• Regularly monitor your account and keep an eye out for suspicious activity.
• When shopping online only use secure websites that are encrypted. Look out for the URL that starts with https://.

In closing, do not use your credit card for wants; only use it for your needs. Do not go above your budget and think carefully before every purchase.