Spending Wisely

Here are a few tips on how to use your credit card(s) prudently, gaining all the benefits of a loyal customer, minus the headaches of accumulating interest rates:

Smart Shopaholic

The same principles that apply to the art of haggling for the best price also apply to the act of buying in general. Sure, you can’t haggle at the malls; but you can shop around. Compare prices, discounts, promotional packages offered by different merchants and the credit cards they accept for payments. Never take for granted the power of competition, what one credit card lacks may be found in anothr. However, if haggling is at all possible, you may want to try that out first.

Keep It Real

Spend within your means. Everybody needs a break and a chance to spoil themselves, it’s true. But if you spend more than you can pay, you may be looking at a long and painful future of working five jobs round-the-clock to pay the bills. Set your priorities for what you really need in life. That $3,000 stereo system can wait; as can those $2,500 pair of shoes; the $700 sheets and the $350 ballpoint with your name carved in gold (however, that $15 dollar cup of freshly brewed coffee from Fidel Castro’s backyard sounds tempting enough).

Impulsive Destructive

Be careful about following your heart’s desire. Most of the time, that’s all there is to it: desire. Just because you had an epiphany about your late grandmother knitting a $900 imported sweater for you doesn’t mean you have to go out and get one. And what about jetting off to some exotic travel spot on a whim? So you’re the kind of person who believes in living life to the fullest, right? Your financial adviser will caution that you have irresponsibly spent away a chunk of your savings for a two-week hotel-hopping, camel-riding vacation. No, the cute souvenirs really aren’t worth the cost of the trip.

Tomorrow Is A Long Time

Pay your bills today. As soon as you receive your statements, keep your inner procrastinator at bay and pay up. Keep a notebook of your accounts and expenses for a record of your spending habits. Meditate on it if you must, perhaps you’ll be enlightened by how much you’ve spent in so little time. Uh-huh, didn’t think so.

Two Is A Magic Number

Don’t apply for more than two credit cards unless you’re personally related to Donald Trump or Bill Gates. You want to maintain a good profile with your creditors, which means paying them in due time and showing your loyalty to them. Instead of signing up for five different cards, it may do you a lot of good to stick with two of your favorites and raise your limit by keeping an excellent track record. Think of it as a relationship—even creditors have feelings.

Interest Rates And Currency

Credit cards can go a long way, and if you’ve ever discovered yourself lost in a strange country, a credit card is the best way to communicate with the locals. Pay attention to interest rates, though. Some credit cards apply a significant interest rate for any purchase outside of the card-issuing country. You can avoid this by carrying cash, debit cards or traveler’s checks. A short trip to the money changer will save you an extra dollar here and there.

+ Maggie Tiojakin

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