How to Use Your Credit Card Wisely?

How to Use Your Credit Card Wisely?

Credit card is the worst type of debt ever. And many people argue proudly that, “I keep credit card for the emergency purpose only.” But well, the reality is that, you should have emergency fund for the emergency purpose and not the credit card.

On the other hand, many finance gurus and personal finance advisors say that, credit card is a bad debt and its next to control your psychological behaviour of using credit cards. So cut down your credit cards and always stay away from the credit cards.

But well, the truth is that, A Credit card is like a double edged sword. If used properly, it won’t harm you but if not used properly than it can make you bankrupt.

There are basically two types of debts – Good Debt & a Bad Debt.

A Good debt is one which is used to finance the assets while a bad debt is one which is used to finance the liabilities.

So if you use the credit card debt to finance the assets than its the good debt but if you use your credit card to finance the liabilities than it’s the bas debt.

I personally use credit cards for online transactions for my Internet Business. I do various expenses with my credit card for the various purpose of this blog business as well as my forum – Investta.com.

For the Emergency purpose, I have the Emergency Fund. I never use credit card as an emergency purpose. Rather than that I have my own emergency fund in my bank savings account for the rainy days.

Many of my friends keep credit cards for the emergency purpose and on the top of this, their emergencies are not defined very well. Weekend parties are also the emergency for them. Don’t use credit card in such a manner.

I use credit card to finance my Internet Business. And I make bullet payments of the entire credit card amount at a single shot. So use credit cards wisely.