Omaha is Nebraska’s shopping paradise, and it’s full of unique boutiques, specialty shops, art galleries, and charming shopping centers. There is undoubtedly a little something for everyone– from fashion mavens and metrosexuals to art enthusiasts and culinary connoisseurs.
What makes this place great is most of the retailers have credit card facilities for the shopper’s convenience. You can use your Omaha credit card to pay for purchases or services. A credit card is an excellent financial product to have since it provides a convenient and safe way to shop. However, there are also pitfalls if it is not used well.
To help you maintain your good credit standing, here are some tips on how you can use your credit card wisely.
#1 Strive to Pay More than the Minimum
Credit Unions and other financial institutions only require that you pay the minimum amount each month. The minimum usually is around 3% of the total balance. Paying this amount ensures that you will not pay any late payment fees. However, if you only make the minimum payment, the remainder of your debt will grow with interest.
If you can, make sure to pay your full balance every month. It will allow you not only to save on interest costs, but it will also enable you to enjoy a certain number of interest-free days on your purchases.
Some unexpected expenses may prevent you from paying in full, but it would be beneficial if you still pay more than the minimum. It’s advised to try as much as you can to lessen your total balance. This practice will allow you to steer clear of debt faster. You will save money by not paying hefty interest costs.
#2 Pay Your Bills on or Before the Due Date
The key to maintaining smooth cash flow is to avoid interest costs and penalties, so pay your Omaha credit card bill either on or before the statement due date. Usually, late payment fees are quite high.
Bear in mind that late credit card payments will reflect on your credit report and may adversely affect your credit standing.
To ensure than you pay your credit card on time, you may set up a direct debit arrangement with your credit union.
#3 Maintain Only One Credit Card
As tempting as it is to have a “safety net” composed of several credit cards, it might prove to cause problems in the long run. So, make it your rule only to have one credit card with a manageable limit.
Not only will this rule keep your spending in check, but it will also allow you to monitor your finances efficiently.
Before committing to a credit card, shop around for the one that has the lowest interest rates and great deals.
#4 Remember to Borrow What You Can Afford to Pay Back
Avoid going into a debt trap by biting off more than you can chew. Remember that even if you do not pay cash during a purchase, you will still need to shell out money after one month.
A rule of thumb would be to limit yourself to one-third of your income on debt. It includes not only credit cards but mortgages, car loans, and student loans as well.
It would be in your best interest if you can show the lenders that you are dependable by borrowing an amount that you can afford to pay back. You can make sure that you stay within budget by tracking your spending. You can either go old school by using your trusted notebook or use a desktop or mobile budgeting app. Credit cards can be a lifesaver, especially during health emergencies. It is a viable financial tool as long as it is used the right way.