Credit card terminalOk, so everybody knows having a credit card helps develop your own personal credit (more on that later). And having a credit card is safer and simpler than carrying cash. However, these cards could cause serious issues in your financial life if not handled properly. Here is what to do to be able to prevent drowning in debt.

Credit Cards

How Credit Work

Get an invoice for everything, and swipe, pay no cash up front you have billed later on.

Things to Keep an Eye On

Interest rates: Your remaining balance will obtain interest, if do not pay your whole invoice. ( means at this point you owe $114.)
Credit history: Be on top of monthly premiums. You build a solid credit history that will assist you acquire large purchases like a vehicle or a house up.
Benefits & Rewards: Cards frequently have benefits (Starbucks, airlines, gasoline, resorts, cash back, etc.). Should you pay your accounts punctually, you can avoid spending cash (and get cash) merely by using your credit card.

Strategies for Use

  1. Use just a couple of cards.
  2. Maintain track of stuff you charge.
  3. Save for large purchases () instead of placing them on your own card.
  4. If spending is getting out of control, leave the card in the home. (We set ours in the deep freezer.)

Debit Cards

How Debit Works

The cash as well as swipe is taken instantly from your own own bank account. There is a debit card much like cash– you can just spend everything you’ve got at the moment

Things to Keep an Eye On

Overdraft fees: Many banks will charge a fee to cover the cost of the purchase when you get something which is more compared to the available balance in your account.
Automatic payments: No late fees since the purchase is taken out of your account. But a credit history won’t be built by you .

Strategies for Use

  1. Keep track of how much and write down is in your account.
  2. Overdraft fees. Do not use your card when your account balance is exteremely high.
  3. Compare your own monthly bank statement from what you wrote down was spent by you (occasionally errors are made by banks).
  4. Attempt to work with just your bank’s ATMs. You will be charged a service charge for drawing money by means of your debit card by other banks.