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Save Money

Avoid Credit Card Debt With These Simple Rules

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Save Money

Avoid Credit Card Debt With These Simple Rules

Navigating the world of credit card ownership can be a maze. Here are some do’s and don’t that will help you get more from less.

by By Dawn Chen, Shape / Additional Reporting by Natalya Molok  /   July 13, 2016

Owning a credit card can be a blessing and a curse. While it can dramatically help your financial life, when misused credit cards can also hurt your wallet for many years to come. To make the most out of this handy little plastic tool, it may be worth following these simple rules to keep debt at bay:

https://www.womensweekly.com.sg/gallery/family/save-money/simple-rules-to-avoid-credit-card-debt/
Avoid Credit Card Debt With These Simple Rules
1. Don't Carry A Balance
image

A credit card is essentially an unsecured loan. This means that, at all times, the credit card must be a mode of payment only, not a mode of credit. You should always pay it back in full before any interest is incurred.

Photo: Pixabay
2. Track Your Credit Utilisation
image

Ideally, you’ll want to borrow only what you can afford to pay back but if you do carry a balance, make sure it doesn’t exceed 20 to 30% of your available limit or it will affect your credit rating.

Photo: Pixabay
3. Do Consider Multiple Cards
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There are no hard and fast rules when it comes to owning multiple credit cards – it all depends on individual circumstances. In general, two cards are enough for most Singaporeans. One for general expenses and the second for the biggest portion of retail spend.

Photo: Pixabay
4. Review, Review, Review
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Never assume that everything on your credit card statement is absolutely correct. Even banks can get it wrong sometimes so it’s best to keep your receipts to match dates & amounts against your monthly statements to avoid being overcharged.

Photo: Pixabay
5. Don't Pay Foreign Transaction Fees
image

Despite a strong dollar, many cards will charge you a foreign transaction fee of about 1 to 3% of what you buy overseas. Some frequent travellers will use a specific card when they’re abroad but cash is still king when it comes to dealing with payments.

Photo: Pixabay
  • TAGS:
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  • banks
  • credit
  • debt
  • finance
  • money
  • savings
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