Kavan Choksi / カヴァン・ チョクシ Lists a Few Credit Card Management Tips

Credit cards have emerged as quite powerful tools, which make it easy for people to pay for daily purchases, build credit, as well as earn rewards. Kavan Choksi / カヴァン・ チョクシ, however, points out that in order to get the most out of one’s credit cards, it is crucial to properly manage them. This would include making payments on time, budgeting carefully, spending wisely, and maximizing the rewards.  Responsible credit card usage helps people to improve their credit scores.

Kavan Choksi / カヴァン・ チョクシ sheds light on a few credit card management tips

Credit cards are an immensely useful tool. They are very convenient to use, often provide rewards, and can help build a positive credit history. They, however, must always be used in moderation.  If not managed carefully, credit cards may cause stress and become the catalyst for debt. Hence, once a person commits to a credit card, they must keep the following tips in mind:

• Pay on time: One of the most important credit card management tips to follow is to pay bills on time. Even a single late payment can lower one’s credit score and drag them into a cycle of debt. By making payments on time, one can avoid interest charges on most purchases and maintain a healthy credit score. In order prevent late or missed payments, it would be a good idea to sign up for autopay or set up calendar reminders.
• Try to pay more than the minimum payment: Even though it is crucial to make the minimum payment on time each month, one should also try their best to make more than the minimum payment and to pay off their credit card balance as soon as possible. This will prevent interest from accumulating.
• Budget and spend smartly: Even though it is normal to be tempted to charge all major and minor purchases to the credit card, doing so can cause a person to overspend. Hence, one should try their best to be mindful about what they put on their credit card. They should only charge the amount that can be comfortably repaid in full every month. Using popular budget strategies, like the 50/30/20 budget, can help keep credit card spending in check.
• Understand credit card terms and fees: One must make sure that they carefully read the fine print of their credit card agreement, and become familiar with all the terms and fees listed there. Common fees one might come across are annual fees, late payment fees, cash advance fees, balance transfer fees, as well as foreign transaction fees. In case one has a question about any particular fee, they should seek clarification from the credit card issuer.

Kavan Choksi / カヴァン・ チョクシ recommends people to keep an eye on their credit utilization ratio and make sure that it is 30% or lower. A credit utilization ratio reflects how much of the available credit an individual is currently using in comparison to their overall credit limit. This ratio plays an important role in determining creditworthiness and can significantly influence a person’s credit score. It is important for people to monitor not only their overall credit utilization but also the utilization on each individual credit card. A high balance on a single card can still impact the credit score, even if the total utilization across all cards appears reasonable.