4 Things You Should Consider When Using A Credit Card

4 Things You Should Consider When Using A Credit Card

A credit card is a payment tool that a financial institution issues to a person. The card enables the cardholder to borrow money up to a certain limit and pay it back over time. However, using improperly can ruin a person’s financial situation. Credit cards are convenient and enable people to pay for goods and services without waiting for the bills. If you are looking for the best credit cards in UAE, you should consider the following things.

Avoid store credit cards:

Store credit cards can be great perks, but they can damage your credit if you don’t manage them well. To avoid this, keep your balance low, pay in full each month, and protect your card number from theft. While store cards can help you build credit, misuse will only leave you with a worse situation than when you started. Store credit cards differ from credit cards in many ways, so knowing what you can expect before using one is important.

Maintain a low utilization ratio:

Your credit utilization ratio is a key element in your overall credit score. Keeping it low will help you get better interest rates and larger loans. Here’s how to maintain a low ratio: It is essential to monitor your credit score regularly. It can fluctuate very quickly, so keep an eye on it.

Ideally, you should try to keep your utilization ratio below 30%. The best way to do this is to pay off your credit card balances in full each month. You can also try paying off your holiday credit card balances to keep your utilization ratio down.

Avoid 0% APR for balance transfer offers:

While 0% APR for balance transfer offers are an excellent way to pay off your balance, you should be wary of using them to make new purchases. Usually, these cards come with foreign transaction fees of up to 5%, and you should avoid making new purchases with these cards if you want to avoid paying these fees. It’s also important to note that these deals are only good for a limited time.

Avoid fraud and identity theft:

You can avoid fraud and identity theft when using credit cards by keeping a few basic safety precautions in mind. Credit card companies have security measures in place to combat fraudulent activities, including skimming devices that can be placed on card readers. If you notice any suspicious charges, report them immediately to the card issuer so they can cancel your card and give you a new one. You should also avoid carrying too many credit cards, as this can make you vulnerable to fraudulent charges. Keep a copy of your account information on hand.