Infrequent Users
There are several kinds of credit card users here. There are people who don’t like the system of credit cards or even understand them at all, but yet it is a very important tool to be familiar with. They stick to cash or debit cards for their purchases. Some people also save credit cards for when emergencies arise. Day to day expenses is paid by other means. Finally, people may not qualify for credit cards with acceptable terms, or they have had problems with these cards in the past.
The advantage of this approach is its simplicity. You don’t really have to worry about payments every month or having a deep understanding of the fine print of the credit card contracts. For people who have an emergency-only card, they have the peace of mind that they can charge a sizeable amount if need be since there’s no current debt on it.
However, this approach has some drawbacks. These credit card users will most likely have low credit scores, which then increases the difficulty in buying a house or even a car. People who don’t have a credit card at all are also missing a financial buffer if something happens.
Three Strategies for Credit Card Use
People don’t always stay in the same category as credit card users. If one strategy isn’t working well for them, for instance, if they get tired of paying off high-interest minimums every month, they can learn from one of the other groups. Users can also do things to improve their credit rating if they don’t yet qualify for the card or plan that they want. Just like many good things in life, having a credit card and building good habits will bring you great joy.
Dana George-Berberich is a freelance reporter and novelist. She has written finance articles for newspapers across the country and for companies like Dun & Bradstreet and Bankrate.
