Choose, Use & Fight Debt with Credit Card

Credit Card is Use because:

• Convenient that can help the user to avoid bringing large sum of cash when making a huge purchase.
• Internet transaction because the payment can be made within minutes
• People use credit card to symbolize their status
  

How to choose credit card?

• Choose a credit card that is widely accepted such as Visa, MasterCard, etc.

Credit card companies or banks usually advertise their cards by giving free gifts or they are having interactive marketing strategy by showing “1.5% per months only”.
Don’t get caught of this statement because
1.5% per month X 12 months = 18%
And the effective rate will be 19.6% including the compound interest yearly.

How to reduce credit card debt?
1. Allocate an amount of reserves for about 50% of your expenses to avoid using credit when there is an emergency.
2. If the amount is too large to repay or it is necessary, you should borrow a personal loan to cover the credit card debt first because personal loan may have a lower interest rate compare to credit card.
3. Don’t increase the emergency funds or invest first before fully repaid your credit card debt.

Remember when using credit card, think about whether you can repay it and pay the bill in full instead of the minimum balance.

Credit cards bring Pros and Cons to the users and you must choose the right credit card and use it effectively without hurting your own financial stability.