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Recommendations for using credit cards this year-end 2022
[/vc_column_text][us_separator][vc_column_text] The month of December, due to the holidays and end-of-year activities, is the month in which users consume more goods and services that are unusual compared to previous months, which generates expenses that, for the most part, are disproportionate. To this, we must add the use of credit cards, which, although they are a mechanism that allows us to carry out financial transactions over time, can be counterproductive if not used responsibly and intelligently. If your end-of-year plans include using credit cards to make purchases, here are some legal and practical recommendations to make the most of them and avoid falling into unsustainable debts that can eventually lead to judicial collection proceedings:
- Don't max out your credit card balance; that is, don't spend more than you would if you were using your debit card or paying with cash. One of the risks of using credit, especially during holidays, vacations, and Black Friday sales, is that you lose your financial intelligence and tend to spend more than your finances actually allow. The key to successful credit card use is having a fixed budget and spending what's already included in it.
- Smart and controlled use of credit cards can help you build a credit record, which will later allow you to increase your payment base or even benefit you if you need mortgage or collateral loans in the future, as long as you pay off your outstanding balance within the timeframe initially established in the contract.
- Avoid cash advances, or use them only in emergencies. First, because withdrawing cash from ATMs reveals a lack of liquidity, which can be a red flag for financial institutions. Finally, because interest or fees are often charged for each cash advance. Don't forget that credit card funds don't belong to the cardholder, but to the financial institution.
- Take advantage of the incentive programs offered by your financial institution. In addition to the benefits of credit itself, these programs allow you to redeem points, cashback, or miles without incurring additional expenses. These are typically limited benefits granted for each dollar spent, but if taken advantage of, they can generate profits for the cardholder, which, during the Christmas or holiday season, is a great way to go.
Finally, also as a recommendation, one of the best practices that financial consumers should have, and perhaps one of the most important, is to secure their debit and credit cards to avoid electronic and cyber fraud. Let's not forget that in the months leading up to the end of the year, there will be more money in the market, and we are exposed to being targets of crimes such as identity theft, card cloning, three-way calling, and, in general, transactions derived from unauthorized third parties. Insurance is an added protection offered by financial institutions and is truly useful, so it is worth taking it into consideration. [/vc_column_text][us_separator][vc_column_text] Written by: Lexincorp Costa Rica [/vc_column_text][/vc_column][/vc_row]
