Establishing a correct consumption concept is the cornerstone of credit card management. Credit cards are not “free money” but a short-term financing method provided by banks. When using credit cards, you should be clear about your consumption needs and repayment ability, and avoid blind consumption and impulsive shopping. Always remind yourself that every consumption is a future debt that needs to be repaid on time.
Develop a detailed consumption and repayment plan
Developing a detailed consumption and repayment plan is a key step in rationally managing credit cards. Cardholders should plan their monthly credit card spending limits reasonably based on their income and expenditure, and ensure that their spending is within a controllable range to avoid exceeding their repayment capacity. At the same time, they should strictly abide by the budget plan to avoid breaking the budget due to a momentary impulse.
In addition, cardholders should also be familiar with the billing date and repayment date of their credit cards. The billing date is the day when the bank settles the cardholder’s consumption last month, and the repayment date is the deadline for the cardholder to pay off all the money on the bill. Ignoring these two dates can easily lead to overdue repayments, which in turn incurs penalty interest and late payment fees. Therefore, cardholders should check their credit card bills regularly to understand their consumption and repayment amounts, and ensure that they repay in full before the repayment date.
Optimizing the credit card usage strategy is also an important means to get out of financial difficulties. If the cardholder holds multiple credit cards at the same time, and the interest rates of each card are different, the credit card with a higher interest rate should be repaid first to reduce interest expenses and reduce the overall repayment pressure.
In addition, cardholders should also try to avoid using credit card cash withdrawal and installment functions, because these services usually incur high fees and interest. For situations where installment repayment is really necessary, the total cost should be carefully calculated to weigh whether it is really cost-effective.
In order to cope with emergencies and unexpected expenses, cardholders should build up a certain amount of emergency reserve. This part of the funds can be placed in a savings account to provide a buffer when credit card repayments become difficult. The amount of the emergency reserve should be determined based on the individual’s actual situation. It is generally recommended that it should cover at least 3-6 months of living expenses.
