Your Flexible Credit Friend

Credit cards get a bad rap but is having a credit card always a bad idea or can using credit make your money work for better for you?

If you have never had a credit card then you might think you have dodged a bullet but credit can be a really sensible option for large emergency purchases and to build your credit history as a responsible borrower.

Credit cards aren’t innately evil – it is what you do with them that can cause problems. Here are some top tips on how you can make a credit card work for you.

• Choose the right card for you; there are many different types of credit cards available on the market with different interest rates and payment options depending on what you plan to use it for.  Check out the options and decide which one best suits your lifestyle
• Pay your bill in full – avoid paying interest on credit by only charging what you can afford to your credit card and paying the bill off in full every month.  Credit cards should be there for emergencies not to borrow money you can’t afford to pay back
• Pay on time – if you want to avoid unnecessary fees make sure you always pay your bill on time.  This will also help protect your credit score
• Consolidate – if you already have credit card debt you can still make it work for you by consolidating your balances into one more manageable monthly payment.  Check out the best way to consolidate credit card debt and get some control on your personal finances
• Keep track – credit can be dangerous if you don’t keep a track on what you’re spending. Most lines of credit offer an online account so make sure you take advantage of it and log in to keep track of what you’re spending
• Be limited – if you’re worried about overspending ask your credit card company to reduce the amount of credit you can have access to. Be disciplined and you will stop yourself spiralling into debt
• Don’t date it – it can be dangerous to take a credit card out with you. If you are planning on a good night out with friends or loved ones leave it behind and resist the temptation to spoil everyone
• Reward yourself – most credit cards offer rewards and these can be a great way of actually saving money.  Make sure you know what rewards you’re entitled to and use them whenever you can to make credit work for you
• Be perky – it’s not just rewards that credit cards offer, you can also benefit from perks such as car and travel insurance.  Even if you don’t use your credit card, having one gives you access to these perks and will be handy in an emergency
• Shop around– don’t get stuck with the same card provider when you could shop a better deal and transfer a balance and reduce interest.  By shopping around you may find you don’t pay any interest at all

With careful planning and organisation you can turn the credit card into a financial hero.