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A credit card is becoming increasingly popular in Vietnam and many other countries worldwide. It serves as a substitute for cash when making online payments, shopping, traveling abroad, and more. Despite its widespread use and usefulness, not everyone knows how to use it safely and effectively, especially those who are new to credit cards. Therefore, Mytour will introduce you to the safe and effective use of credit cards in the following article! Let's dive in!
Mastering Safe and Effective Credit Card Usage
1. Paying in Full Every Month
This is the first rule for using credit cards safely and effectively. If you want to avoid trouble, you must never let credit card debt accumulate. Therefore, every month, make sure to pay off your credit card in full. If you're unable to do so, you can make multiple payments within a month. This will help you avoid accruing interest on your credit card due to incomplete payments.
2. Paying Credit Card Bills on Time
Apart from paying in full, paying on time is also crucial. This is because if you pay late, the credit card issuer will record it and may impose a penalty fee. Moreover, paying on time is a way to keep your interest rates low and improve your credit score over time.
3. Regularly Check Your Credit Card
One advantage of credit cards over cash payments for purchases is that you don't have to keep various receipts or paper invoices. Instead, you simply need to log in to your online account to see where you've spent money, how much you've spent, and how much you have left on your credit card. Therefore, make it a habit to log in and check your credit card account regularly (at least once a week) to easily monitor your expenses. If you find yourself exceeding your monthly repayment capacity, stop using your card immediately until you receive your payment balance. Regularly checking your account activity can also help you detect any unauthorized transactions.
4. Use Your Credit Card Only for Major Expenses
When you need to purchase something, it's preferable to use cash first rather than a credit card. For large-value items, you may consider using a credit card because after making a payment with a credit card, you'll earn reward points. These reward points can be useful in many situations. You should also aim to pay off the balance within a few months or as soon as possible because delaying payments may accrue interest.
5. Limit Cash Withdrawals from Credit Cards
Credit cards differ from debit cards and many other types of bank cards. You can use a credit card to withdraw cash from ATMs, but you'll incur a fee for this (typically in Vietnam, it's 4% per transaction). At this point, the bank will begin to charge you for the amount you've withdrawn, and this fee is considered quite high. Therefore, you should limit using your credit card for cash withdrawals as much as possible.
