Credit cards are an important financial tool when it comes to having an available line of credit when you need it.
The ease of that available credit is what can get you into trouble. Using credit cards responsibly is an important part of budgeting and tracking your expenses in order to eliminate debt or to accomplish your financial goals.
Mvelopes helps you to manage your credit card expenditures, but there is still more you can do even after that to be a responsible credit card user.
1. Mvelopes’ Money For Envelope
Inside the Mvelopes budget app is the “Money For” envelope. It is there to help not put more money on your credit card than you can pay off. As you use your credit card to pay for items that come out of your budget, Mvelopes takes that money from the envelopes where you assign the transaction and places it in the “Money For” envelope.
When the end of the month comes, the money to pay off what you have put on your credit card that month is there waiting for you, plus any additional money you may have been planning to pay off as well.
It’s one way Mvelopes helps you get out from under debt or to avoid it altogether. Using credit cards responsibly includes things more than just paying it off in full each month so you don’t have any new debt.
Check your monthly statement for any purchases you didn’t make or for anything that looks suspicious to make sure your identity is protected.
Always report a lost or stolen card immediately.
3. Use It Like a Debit Card
If you’re going to be paying off your card each month as you should, then using your credit card like a debit card will work wonderfully and hopefully give you rewards for doing so.
Don’t use it like the line of credit it actually is. If you don’t have money in your budget set aside to pay for what you’re buying then don’t put it on your credit card. Budgeting for periodic expenses and having an emergency fund will keep you from using your credit card to increase your debt.
4. Pay It Off Each Month
This has already been mentioned twice, but the third time is the charm. Pay off whatever you put on your credit card each and every month. It’s yet another sign of whether you’re keeping to your budget.
If you’re using your credit card to earn rewards or points of some kind, make sure to maximize what you can redeem and use.
Don’t be afraid to shop around and make sure you’re getting the biggest bang for your dollar. Check to make sure that if you’re paying an annual fee it is worth the money based on your spending.
Don’t make purchases you wouldn’t normally make just for the points.
6. Policy and Fees
Before agreeing to a credit card or when policies change make sure and sit down to read the policy agreement. Pay attention to rates and fees and any actions that cause them to increase.