When you buy on credit, you do it through a payment that differs, the goods or services that you acquire are financed by the bank or a commercial establishment and you have the commitment to pay it deferred, with an additional cost in the form of interest, and on a date due date for you to make the payment. This makes it necessary for you to organize yourself so that you do not make only the minimum payments and even less that sometimes you do not make the payments, which would complicate the management of your finances.
The purchase made in this way is made beyond your possibilities, and although it allows you to acquire the product quickly, perhaps take advantage of an offer, it can be expensive due to the interest payment.
Experts in personal finance point out that the limit of your debts should be equivalent to 30 or 40% of your total monthly salary. Photo: Pixabay
So it is necessary that before buying on credit you evaluate whether it is essential or urgent to acquire that, if it is something for recreational purposes you can make the purchase later and save so you can pay for it. Also take into account your situation, if you are single, married or if you have children.
If there is no other option and you must use the card to buy what you want or need, we make the following recommendations:
1. Check your income. For you to put a limit on your debts, experts in personal finance point out that the limit of your debts must be equivalent to 30 or 40% of the total of what you earn per month.
2. Buy only what you need. Here you could lean on a budget, with which you can set limits on what you spend and adjust those expenses to the essentials.
3. Don’t spend more than what you have planned. You must prioritize, acquire the most important and necessary, while leaving other things for later and if you can at once put aside what your income level does not allow you to buy, it is not going to be that because you deserve it you make an effort unnecessary and you end up getting it.
4. Organize a financial calendar. Planning in the use of your money is very important, you need to know what you are going to spend your money on, how much you are going to spend and when you will. For this you can develop a financial calendar, in which you write down:
The dates of payment of expenses such as water, electricity, telephone and food. Write down the dates of the expenses you can schedule, like vacations, clothes, and school supplies. Write down the dates of payment of the credits: cards, mortgage loan, car loan.
It is not enough to register the payment dates, it is necessary to put reminders so that you keep in mind all your payment commitments and make them timely.
6. Save the receipts or tickets. Avoid having to pay for undue charges such as things that you did not buy because they made you a double charge, save the receipts or purchase tickets, for when you need to make clarifications.
7. Pay more than the minimum. If you pay the minimum on your card, it will take a long time to cover your total debt, in addition, interest will accumulate and you will pay much more than expected. Then pay more than the minimum amount so that you get out of your debt before and that in your credit history you have a good rating that opens the door for you to obtain credit when you need it.
Use credit to your advantage, do not generate unpayable debts that affect your family’s assets. Make your credit cards allies for your well-being, do not make them the cause of your financial complications.
More information in our Credits Section.