The Right Way to Use Credit Cards

• Credit cards have several benefits:
• They help you increase your credit rating
• They provide purchase protection. For example, I bought 12 months gym membership on my credit card but my gym went bust and closed without giving me a refund! Luckily, because I paid with credit card, I got a refund from the credit card company rather than gym.
• They can give you “cashback” or vouchers/rewards.
• Credit cards will also kick your ass if you do anything wrong such as:
• Go over your spending limit.
• Withdraw cash from your credit card,
• Pay your monthly bill late
• Pay off only some of your monthly bill
• So when using a credit card, remember to:
• Set-up a direct debit to pay the full amount of your monthly bill automatically. 
• Ensure you always have enough money available to pay your direct debit (e.g. you could set your direct debit to be paid soon after pay day).
• Do not go over your credit card limit! Find out how to setup text message alerts if you are getting close to your limit otherwise the bank will not tell you when you go over, they will just charge you.
• Do not get lazy and do not get into debt with your credit card.
• If you make a mistake and get charged, phone the credit card company and they will hopefully cancel the charge. They usually are quite lenient if it is your first mistake. They will be less forgiving for a second mistake, so you may want to switch credit cards once you have made a mistake.
• Which credit card should you go for?
• For most people, a credit card from your favourite supermarket is ideal. This way you will earn “points” when you spend there and elsewhere, which they will convert into money-off vouchers!
• Or if you frequently fly with a particular airline, you could get a credit card that gives you airmiles to spend on flights. 
• Alternatively, American Express give lots of rewards but are less convenient as not all shops will accept them.
• If you are making a big purchase, e.g. a car, you may want to get a credit card with an introductory offer of 0% on purchases for 12 months (for example). This means you could slowly pay off the cost of the car over 12 months rather than all at once, without being charged any interest - basically an interest free loan! But remember these rules:
• Although you do not have to pay off the full amount in the first month, you must still make the “minimum payment” each month to avoid any fees. This is usually very small and it is not a fee, it is a small payment towards your balance. Set up a direct debit to pay this automatically each month then you can forget about it!
• You may not be reminded when your 0% introductory offer expires, so remember to put a reminder on your calendar when you first sign up!
• You can pay the balance back slowly over the 12 months (by manually transferring money to your credit card) or all at once on the 12th month. Either way, make sure you have paid the entire balance when the 0% ends, otherwise you will be charged lots of interest.
• As always, never go over your credit card limit! This would be a huge mistake as they will cancel the 0% offer and charge you lots of fees! If you are near the limit, pay some off or stop using your credit card. The bank will not tell you if you go over so keep an eye on it!