There are a lot of experiences – good and bad when we are in our twenties from the excitement of getting that first pay check to our first self-funded bank accounts and credit card. All experiences, whether good or bad are meant to give us a lesson. In this case, let us dwell with our newly found financial power – credit card.

Having a credit card gives us power to purchase whatever we want (as long as it is within the credit limit). However, if we do not know how to deal with it, it can ruin our life and our future. As early as now, we have to identify bad habits and curb it before it is too late for our finances. Here are the don’ts and action plans:

1.Credit card payments: When we take on the responsibility of having a credit card, we have to remember two things – the cut off and the due date. Cut off refers to time covered by the billing period. This is usually sometime mid-month. There is no escaping our due date. We have to remember that if we do not pay at the right time, the bank will levy 3-4% of interest. The action plan is simple: never forget the due date.

2.Paying minimum only: If we have the money, why not pay all the credit card debts at one time? If we pay minimum and leave the rest next month, there will be new expenses. If this is our habit, we should not be surprised if our credit debts are piling. The action plan is to pay the full amount so we won’t worry about the amount the next month.

3.Unsupervised auto debit: Today, we do not need to worry about our monthly bills because we can just link it with our credit card. While this is convenient, this is a little risky because we are allowing the companies to automatically deduct the amount. The best thing to do is to be careful when we link our credit card.

4.Know our worth: Even if we think we have a good career, it is still better if we check how much money is coming in so from there we can assess how much we are going to splurge.

If we want to keep away from debts, we should not consider credit cards because it can really take a toll on our finances. At the end of the day, everything will depend on us.

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