Following are the few instances where you should restrict the use of your credit card to manage your finances:
1 Using for everyday expenses: Mostly people use credit card for groceries and household items but using it regularly may result in overspending and crossing your monthly budget. Always specify your monthly budget for these items and use credit card within this limit only. Beyond this either use cash or your debit card.
2 Using for Cash Advances: Drawing money from ATM through your credit card is the best way to cope with the cash shortage but it will be costly for you. Besides interest rate charges on the advanced amount, it will also gets charged from day one itself. And you will also have to pay a flat transaction charge as well.
3 During Restricted Cash Inflows: If you do not pay bills within the due date, you will be charged a heavy late payment fee, high interest rate of 2.5% to 3.5% per month and taxes are also charged on these charges. If you think you will not be able to generate cash flows to make payment on your credit card within due date, it is best to avoid using it.
4 Using While Travelling Abroad: When you use credit cards for transactions in foreign currency then you will have to pay a charge for foreign currency transactions. And you will pay according to the exchange rate fluctuations. It will be better to opt for prepaid currency card.
5 Using for Accumulating Reward Points: Accumulating reward points is good but spending on your card only for this reason is not a healthy habit. You will realize that instead of high reward points you are paying heavy bills, some times even on unnecessary purchases.
6 While Shopping at Unsecure Websites: Online shopping is very convenient way of shopping but you must avoid using your credit card and sharing confidential information on websites which are not secure. Always check for security levels before making credit card payments.
7 Using After Crossing Limit: It is best to stop using your credit card when you are close to your credit card limit. It is not only best for your credibility but also helps in keeping a check on you expenses.
8 Using in Discount Sale: Using your credit card immediately after seeing a discount sale, it will definitely exceed you budget limits. Use credit card only for things you need. When you use your card for unaffordable purchases. you will soon end up with huge debt.
9 In Case of Multiple Cards: When you have many credit cards, keep a note of the billing cycle and due dates of each card. Do not use card which is closer to the billing date, This will give you a higher credit period and make more sense to your finances.
Your suggestions and comments are welcome.