When To Put Your Credit Cards Away

Some people prefer using credit cards to make purchases, and there’s good reason why. Cards can be used to help you build good credit, learn financial responsibility, and are sometimes safer to use than cash since you can dispute false charges. However, in certain situations, it’s a better idea to put your credit cards away and opt for cash.

When You’re Making Large Purchases

Just because you can put that new HD TV on your credit card, it doesn’t mean you should. When you’re making big purchases, save up half of the cost in cash, so you can pay off the credit balance right away and avoid paying more in interest.

When You’re Close to Your Credit Limit

If you’re not paying down your credit card debt, continuing to use your card can not only cause you to accrue more debt that you may be able to pay off, but it can also lower your credit score. Try not to use more than 10% of your card limit — use cash or a card with a lower balance instead.

When You’re Gambling

It’s easy enough to get carried away and spend a lot of money when you’re gambling with cash, but it’s even easier if you’re using a credit card. Financing any kind of gambling with a credit card puts you at a higher risk of losing your money and being charged fees by a casino.

When You’re Simply Not Good with Plastic

When you use your credit card on a lot of small purchases, such as food or trips to the drugstore, you may not realize how quickly little expenses add up, and you could end up charging more than you can afford. If that’s the case, you’re better off making most of your purchases in cash.

If you’re going to use credit cards for your purchases, you need to make sure you’re making smart financial decisions. At American Investment Planners LLC, we make it a priority to help you prepare for the best financial future possible. From managing your cash to estate planning, we’re here to help with anything you may need. To schedule an appointment with one of our advisors, please call (516) 932-5130 or email info@americaninvestmentplanners.com.