Credit card – Convert an enemy to close friend – A journey through personal experience

Those who prepares budgeting as the preliminary step to personal financial planning, normally giving weightage to monitor the credit card usage to identify and eliminate unnecessary expenses.

Even, personal finance advisers recommend this as the first step. Credit cards are the major enemy to a person who doesn’t have control on spending. This article sharing my personal experience, how I made a credit card as one of the best friend of mine.Using credit card is good but bad at the same time. Both depends on our way of thinking and control on spending. I have experienced lots of people suffering from huge credit card debt which taking major chunk of their earning in each month. If you control a little, you can easily convert a credit card as one of your best friend in need.As a preliminary step of making a credit card as your best friend, always select a credit card carefully. Prior to filling the final application, collect necessary informations on charges and services providing by various credit cards. This would be vary by company to company. Compare the costs, interest rate, services and other areas like customer care clarity etc.. to identify a best card suitable to your needs. Due to the heavy competition in the credit card segment, most of the credit card companies offering life time free credit cards. Take advantage from it. Such features eliminating the requirement of paying annual fees for the cards. Always remember to ask and identify if there any hidden costs involved behind such offers. Asking to the existing customers of similar card will give you a clear picture about the facilities and drawbacks.Never accept the credit limit offering by the company. Instead, always set your own spending limit. For my card, I had set a spending limit equal to my one month budget. It helps me to use the card intelligently only for buying any items that is required for the month. Such credit limit preventing me to use the card to buy any items that not included to my monthly budget.Other benifit a person receiving to do so is, he will think twice before using the card to buy any product or service because its limit. Gradually, it will shape him to identify the ‘want’ and ‘need’ to use his card intelligently.Limiting your credit card amount will put you in a safe side in case of loosing the card (I fear this as most). If such burglary occurs, and you are not able to contact the credit card company immediately, the person who steal your card can use the same for limited amount. I personally knew the saddest story of various people, suffered from huge debt due to misuse of their card heavily after losing the same.I generally don’t have a practice of using credit card. As per my budget, I am transferring fixed amount for each month, to a separate bank account. This enable me to use their debit card to do any purchased. In some situations, I am paying directly by cash. I never used my card for balance transfer. Yes, balance transfer is a nice facility offering by credit card companies. But remember, it is a hidden debt trap set for credit card users.Don’t fall to such trap.In my life, I never used a credit card to withdraw money from any ATM. I am not able to do such because tearing of the PIN number immediately after receiving the same, without opening. Using credit card to withdraw money from any ATM is, of course, costly. Not having the ATM PIN saving me from any possible temptations to withdraw money from an ATM.I have another reason to keep a credit card. It is of course, working as an emergency friend for me. Yes the credit is limited to the maximum low level. But, some time, situations compel you to have some immediate amount and final settlement will be later. I don’t know how you are going to treat this article as well as my practice. Its all depends on one’s mind. For me, credit card is an assurance and through such, I am confident by fully loaded with enough money required for my next month budget.