Credit card is a convenient buy-now-pay-later finance tool which lets you carry out routine and high-end shopping with ease. Credit cards when used effectively can be a great financing option especially in times of urgencies when you do not have any cash on you.

What is credit card - It offer a line of credit to help you buy, transfer funds, cash advances and pay back this loan in the future. Every month you are needed to make at least a minimum amount due towards the card. If complete balance on card is not paid off interest is applied. Interest is levied from the day the transaction for cash advance or balance transfer is made.

Here are some things to know to use your credit card well.

#1

Did you know that your credit cards can be used to improve your credit score?

The credit card issuer will report every monthly payment that you make to the three credit reporting firms. With each monthly bill paid, you contribute to the successful rating of your credit score. Regularly using the credit card responsibly will allow you to build credit because it shows lenders that you can manage credit well.

#2

Making credit card payments on time lowers the credit-debt ratio that you have and this works to reduce your debt and improve the credit score. In managing your monthly credit card bill, it is vital to make at least the minimum monthly payment required on or before the due date.

#3

Purchasing with your credit card is like taking a loan on EMI. Where you are required to pay the principal amount with a fixed interest rate over a stipulated term period. You may check the features of your credit card to know more about the charges and how to easily pay it off.

#4

Each time you make a transaction using your credit card its limit goes down. To maintain a good credit score make sure to maintain the 30% credit utilization rule. There are two ways of doing it - either use the credit card wisely without going over the limit or accept the offer of credit enhancement from the lender.

#5