Money Management Tips: How To Properly Use Your Cards

When it comes to spending and managing our finances, there are a number of ways to take control. Credit cards are not only convenient but also help build up credit and good credit shows lenders you are reliable. These plastic cards can be your best friend during times of need, but if you are not careful with how you use them or, in short, abuse them, they can create financial ruin. That is why you always hear about people who have run up a very high credit card debt. If you are new to using cards, a credit card is a line of credit and works somewhat like a loan, where you are expected to pay back the amount you spent within a certain period. Typically, you are billed each month, and if you’re late paying off your credit debt, interest is automatically added. Every credit card has a certain amount of money in it that you can spend, and if you try to spend beyond that limit, your card will be denied.

With that brief explanation, let’s get into how to use your credit card in a smart and efficient way that will not lead you into debt and at the same time help you during financial stress.

Choose the Right Card for You

First things first. You will find a lot of card options and a lot of bank jargon that you might not be familiar with, making it confusing on what kind of card to choose. The best card to use is the one that best suits your needs. For instance, there are travel credit cards available that give you points and rewards based on how much you travel. So you can get excellent deals on tickets, hotels, etc., but if you don’t travel often, that credit card won’t help you.

People typically pick their cards based on one of these three criteria:

  1. Cards that help boost a poor credit score: Your first step is to find out what your credit score is. When you understand your credit score better you can take actions and measures to improve it. Not knowing how it works means you don’t know what the mechanisms you need to work on to improve, or what is causing the decline in your credit score. The better it is, the better chance you have of getting approved. That’s why students, for instance, often apply for student credit cards which are easier to obtain than other types of cards, because students don’t usually have enough credit history.
  2. Cards that charge less interest than others: These cards work well for people who mainly use a card for emergency situations only. They also work better for people who don’t have a regular income. But you are not likely to come across these cards if you have poor credit.
  3. Cards that provide rewards: For those who pay their credit card debts on time, these cards are a great option. Financial wizards at Dyer News explain that these cards can give you points, but even better, they give you cash back on every dollar you spend. Cashback is what everyone wants because it’s cash! And that money can go into your bank account. There are different categories of cash back, and some categories can go as high as giving you 3% to 6% back on your spending.

Needs vs. Wants

If you are old enough to use a credit card, then you are old enough to know the difference between a need and a want. You need to pay your bills, pay off debts, and spend on necessities like food. Your wants are a new phone or a new wardrobe or anything that you don’t really need. People who use credit cards wisely use them for their needs and not their wants.


Keep a tab on your expenses and create a budget for yourself. For those who are no good at sticking to a budget, one suggestion is the 50/30/20 method. In this rule, you spend 50% of your salary on your daily needs, 30% on your wants, and 20% on paying off debts. This helps to assure you don’t go wild with your spending.

Automatic Payments

Since credit cards are really tempting to use regularly, it might be best for you to set up with the issuing bank an automatic payment schedule where your card payment is automatically scheduled. That way you don’t have to worry about missing or forgetting to make a payment so that interest does not accumulate, and you don’t weaken your credit score.

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To keep your finances healthy, you have to learn to manage your money. Much of money management is paying your bills on time, paying off any debts, and making sure you have enough for daily living. When these factors are controlled, you can then start to save for your

Written by Eric

37-year-old who enjoys ferret racing, binge-watching boxed sets and praying. He is exciting and entertaining, but can also be very boring and a bit grumpy.