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Credit cards are seen as some evil plastic card that will ruin your finances. This is simply not true if you actually know what you’re doing. Here are a few simple steps to go about that:

1.) It’s Not Free Money

People often get a credit card and right of the bat, assume it’s free money. That’s most definitely not the case, just because you have credit doesn’t mean you should buy things you can’t afford. Change your mentality and treat a credit card like cash or a debit card. The interest rates are usually extremely steep if you don’t pay off your balance. Don’t fall in this perpetual trap of debt and only spend the money you have. Don’t think you can afford a big plasma for your living room because you can pay it off monthly. The interest rate will add up and haunt you if you don’t pay attention.

2.) Pay Your Balance in Full

In order to pay your balance in full you have to, once again, have the money on hand. Unless it’s an absolute emergency, don’t make a purchase that you cannot pay for in cash. Don’t have the mentality that you’ll have the money when the bill comes in the mail, often times that won’t be the case and you’ll have to pay extra for no reason. Don’t subject yourself to unnecessary debt because you have no self control. It’s not worth it.

3.) Take Advantage of the Perks/Rewards

Credit cards have many perks. Some cards offer an extended warranty on all purchases, an improved return policy and most importantly fraud protection. If you use cash or a debit card, once it gets in the wrong hands, the money comes straight out of your pocket. By using a credit card it eliminates that risk completely. The reward points or cashback that comes with credit cards is also a huge benefit. It might not seem like a lot but you get nothing from using cash and almost nothing from debit cards. So why let that go to waste? It’s something that is totally free to you if you don’t carry a balance. Also, it’s very easy to take advantage of the special sign up offers. Often times, you get cash money with your first purchase. This is literally free money, if you don’t carry a balance.

The main lesson here is to treat a credit card like it was cash. Pay it off in full each month and don’t spend money you don’t have. This way you get to enjoy all the benefits with absolutely no cost to you.

Be a Planned Man

Men Use Their Credit Card Effectively

Men Use Their Credit Card Effectively