Credit Card Tips By A Broke Person
Ok, so if you're reading this then you must be in dire need of help/advice/guidance, and all I can say is that I'm the last person to give anyone any advice, especially when it's related to DOLLAR DOLLAR BILLS.
Let me help you. But I would like to point out that I'm no expert, and all the tips below are just from my experiences, knowledge, and mainly just whatever is popping up in my mind, I end up typing down.
Before I share a few tips, I'm gonna share a very stupid Credit Card related situation with you.
I have two credits, recently I paid one off and I was sooo happy! I cut it up, BUT what I didn't do was call the bank to actually cancel the card so I couldn't use it.
A week or two later I'm in a fancy AF book store using their washroom and I was just sitting there after going pee because I had just done leg day at the gym and I honestly could not move. Anyways, sitting there I whip out my phone and next thing I know, I'm scrolling through IKEA purchasing their cheapest couch - which btw is SO UNCOMFORTABLE.
Being the stubborn little shit that I am, I refused to check my account until pay day which was in a weeks time.
Pay day arrives and I check my account and see that I'm back to square one with this dumb ass CC. My statement went something like this excluding IKEA
UBER, UBER EATS, UBER, UBER EATS, PHONE BILL, UBER, SOCKS FROM AN ONLIN STORE, UBER EATS.
You get where I'm going with this. So just cutting up the card and not cancelling it, isn't going to help you because if you're anything like me, you're going to still carry that card around and just read the numbers and enter it into your phone/laptop when you're making an online payment. FML.
So here is a list of random tips that I've learned over the years when it comes to using a credit card.
OK LET'S GET STARTED!!
The most important tip I can share with you is tip number 1.
1. Don't Get A Credit Card
DON'T EVEN APPLY FOR A CREDIT CARD. DON'T DO IT. Especially if you're unsure of how they work, don't actually need it but you just want it, and if you're still trying to figure out how to budget your day to day, weekly, or monthly expenses. Until you've got all that down, DON'T GET A CREDIT CARD.
2. Self Inflicted Debt
Here's an example of self inflicted debt.
I'm going to use traveling/going on a holiday as one example. Now don't get me wrong, I'm a firm believer in traveling, even if you're broke, because the experience you gain, and the memories you create (omg wait, how cheesy do I sound right now? Gross), can never be created through any other aspects in life. I don't even know if what I'm saying makes any sense. Lol.
Here's what I'm trying to say - Don't apply for a credit card because you want to go on a holiday and say to yourself ''It's purely for this trip, and I'm going to cancel it as soon as I'm back and not use it for anything else''. Like, STOP RIGHT THERE, who you tryna fool?? I'm so guilty for this one that we all know you're not going to cancel it, I know you're not going to cancel it, your momma knows you're not going to cancel it, even inanimate objects know you're not gonna cancel it. DON'T DO IT. Even if you're getting a CC for some other reason like, to cover rent for a month (guilty again), or paying for something else in particular, we all know once you use it for whatever particular purpose, you're still going to continue to use it.
If you're someone who has self control, and can find the strength in cancelling the card, PLEASE TEACH ME!
3. Checking Your Bank Statements and Accounts
Check your bank statements and accounts regularly. I totally get how depressing & stressful it can be checking your bank account, and statements. Knowing you're in debt, have so much to pay off, or maybe you have very little money sitting in the account, it sometimes feels easier to just not look at it, and hope that the card just doesn't decline when you go to use it. I've done this so many times, I even warn the cashier, waiter, or whoever is serving me, saying to them that this might go declined, and I just laugh because I have no shame. But where I'm going with this is that not checking this info is actually going to put you in more stress, and in a tougher financial situation than you think.
- You may realise that you don't have as much money as you thought you did.
- You'll probably end up estimating your budget totally different and it's just gonna screw you over.
- You're not going to be aware or cautious of your spending, and you might just end up over spending. (Omg I need to take my own advice).
- You'll be out with friends drinking and decide to buy a round of drinks or shots thinking you have money to spend. I'M SO GUILTY FOR THIS ONE TOO.
- I had a few more points to drop down, but now my minds gone blank. DW there will be a part 2.
4. Interest Rates
Understand how interest rates work before thinking of getting a credit card. Interest rates are one of the main ways, apart from many others, how banks make money from their customers. I know, because I used to work at a bank. Look for the lowest interest rates, keep an eye out on other banks and what their rates are as well as talking to a bank teller in person or over the phone, and getting them to explain to you how they work.
I usually suck at explaining most things but what an interest rate is, is basically a certain % figure of what they charge on top of how much you owe.
5. Minimum Monthly Payments
When you check your account and you see that your minimum monthly payment may be $20 or $50 or $100, that doesn't mean you just pay the minimum, you've still got the rest of your outstanding balance to pay! Whenever I'm making a payment to my card, I always pay a lot more than what is actually due.
There have been times when I can only afford the minimum amount due and that's totally understandable, but if you can afford to pay more than that, THEN YOU BETTER DO IT. When you only pay the minimum, in the long run you will end up paying more than what you owed in the first place. Majority of the time, these small minimum payments you make only cover the interest fee. Yeah you may be avoiding late fees and maintaining a good credit history, but you're not really getting anywhere in actually paying off the card. BOOM.
6. Different Types of Credit Cards
Banks have many different types of CC's to suit different needs that customers might have.
With some CC's you can get different types of benefits.
- Reward points.
- Air mile points.
- Other travel points.
- Movie points
Wait, why can't banks create rewards related to alcohol?! IMAGINE HOW POPULAR THAT TYPE OF CARD WOULD BE. OMGGGG.
Anyways, the list goes on. It also varies depending on the bank, and what country you live in.
Either way, with most CC's there's an annual fee attached. The better the benefit, the higher your annual fee would be most likely.
Ok that's all for now! There will be a part 2! Thanks for reading and share the link with your friends and family if you think this would be helpful! I say share the link because there's no option for me to link my instagram, snapchat, and FB icons here :(.