Credit Card Management: It Is All About Being Smart

Whether it be your first day on a school campus or receiving it in your mailbox, you are bound to get credit cards applications. Although it may be tempting to fill out and submit the applications, you have to think to yourself, “Do I need a credit card and the responsibilities that goes along with it?”.


Depending on your financial situation, acquiring a credit card can be an asset or a burden.  In either case, it is vital to remember that having access to a credit card does not translate into free money to spend.

In order to avoid the problems that associated with using credit cards, here are five tips to consider to be smart when to comes to buying with plastic money.

Tip #1: Know What Kind Of Consumer You Are?

This tip is the most essential piece of advice to follow when it comes to using a credit card.  If you find yourself buying items out of sheer impulse, then you may want to consider leaving the credit card at home until you really need to use it.  If you are more caution consumer, then you can have the card in your wallet to use when needed and if you have money in the bank to pay your bill. (See Tip #2)

Tip #2: Have Money In The Bank

Credit cards should be used as a convenience tool and not as a financing tool and thus you should have money in the bank to pay the bill when it is due, regardless of the amount.  If you are unable to pay the bill in 3 installments (with interest), then you should not be purchasing the item.  Remember, just paying the minimum amount continuously is not sufficient enough if you want to be a smart credit card user.  Consider using your debit card instead since your money from your account will be used for the purchase.

Tip #3: Know When You Will Be Using It

As the world moves rapidly to cashless society, we are pushed to use credit and debit cards.   As a result, we must be careful about when they are used.  Attempt to use it when cash payments are impossible such as buying on the web or paying for a monthly amount for a service that you deem essential such as a cell phone bill.  (If you are paying monthly for a service with your credit card, be sure that the amount is already allocated in your budget.)

Tip #4: Pay Your Bills On Times

This tip might seem elementary, however; you will be surprised how many people fail to pay credit card bills when they come due.   Whether it be avoiding the responsibility or simply forgetting payment, not paying bills on time will result in paying more for the item(s) that you did if you were to pay cash thus putting more money in the pocket of banks.  To avoid this unnecessary situation, use reminders on paper or electronic calendars to indicate that you have a credit card bill due.  In addition, if you have access to your bank account via the internet, you can easily pay the bill within a matter of mouse clicks.   Banks also offer automatic payment services to assist clients in meeting their credit card obligations.

Tip 5: Know What You Are Getting In Your Card

Although the primary criteria in selecting a credit card should be the interest rate on purchases, there are other factors that you should consider such as: interest rates on cash advances and balance transfers., a large Canadian bargain hunting and coupon website, has a great comparison tool ( for all the credit cards where individuals can make the best decision in selecting the right card.

Credit card companies and banks do not hand out credit cards just because they want you to help you go a spending spree.  They are counting on users to mismanage credit in order to profit from interest rates and other fees associated with late payments in order to make a significant profit.  It is your responsibility to make sure that you do not contribute to their profits by using credit cards wisely with the right approach.

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About The Monnaie Money Project:

For the past four years the Carrefour jeunesse-emploi de Côte-des-Neiges and the Jamaican Canadian Community Women’s League of Montreal Inc. have been very active in promoting financial literacy to the wider community in the city of Montreal. This experience has been extremely valuable as we are in constant contact with youth and seniors from the various cultural communities. They have expressed to us what their needs are in terms of financial literacy programming.

Follow Monnaie Money on Twitter @MonnaieMoney


3 thoughts on “Credit Card Management: It Is All About Being Smart

  1. Great post. Credit cards for some is like a second income and should never be viewed or used in that capacity. We use credit cards all the time but mainly to score rewards points and the bill is paid in full each month. Cheers Mr.CBB

  2. Pingback: PF Weekly, Grab A Brew #24: Who Has The $23,000 Box | Canadian Budget Binder

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