According to CNBC, at the end of 2019 American consumers had accrued a record $930 billion dollars of credit card debt. It is easier to overspend with plastic than with straight cash. It is even easier to find yourself drowning under interest fees if you find yourself unable to pay off your bill even a single time. In fact, that is what many credit card companies are counting on. With all of this, it might seem better to avoid credit cards altogether. You don’t need a wealth management professional like AOG’s Frederick Baerenz to tell you that being unable to save due to credit card debt you can never quite catch up with is not the best financial situation to be stuck in. However, there are some actions you can take to manage your credit card usage more responsibly even without the expertise of companies like the one run by Frederick Baerenz.
1. Pay Your Bill Each Month
It is important to pay your credit card bill each cycle. You should at least send in the minimum payment. This will keep you free of extra charges like late penalties and interest. It will also help protect your credit score.
2. Pick a Card With a Rewards Program
Choosing a credit card that offers rewards through points might actually earn you money. While it is true that many companies entice possible customers with rewards then trap them with interest, making the few points awarded not worth it, it does not have to be this way. If you pay your bill on time and in full every month, you are not losing any money. Instead, you are gaining.
3. Only Use a Credit Card for Needs
Many individuals have a habit of purchasing everything on a credit card, contributing to the debt crisis. However, only using it for true needs or emergencies can keep you from exceeding your means.
Credit cards are easy to misuse, leaving you in a bind. However, when used cautiously and with frugal awareness, they can be beneficial and even make you a little extra money.