Credit cards have become essential tools for managing personal finances. However, poor card management can cause financial problems. How to prevent the accumulation of debt? The key is to develop a good plan and follow it.

There are different methods or strategies for getting out of debt. Credit cards.

Those who work with this type of document need to be clear the difference between cut-off dates and maximum payment dates. The first one refers to the period of one month in which the card issuer closes the incurred costs, and this period is 30 days. The second refers to the date on which the client must pay the minimum amount, usually 15 days after the cut-off date. If you do not comply, you must pay late payment interest.

Rewards, from travel to products, learn about the benefits of using credit cards

Having a credit card allows users to take advantage of its benefits, such as building a credit history. I use the money I don’t have for investment or special expenses. According to financial coach Andrés Mórtola, proper card handling It enables obtaining financial benefits, “that is, they lend me, and I pay them back at the end of the month, if I pay on time, without paying interest”.

Credit card payment strategies

Cases in which you should not use your credit card

Errors when using credit cards

Financial product comparator has prepared a list of seven typical mistakes when using credit cards.

1. Use the card for everyday expenses. Remember how high bank interest rates are. Experts recommend that you do not finance ongoing everyday expenses and that you do not abuse credit cards. The first mistake is buying food and other products in supermarkets with a credit card, and the bigger mistake is choosing to pay on a deferred basis. You will only deepen the debt on the card.

2. Don’t always review your account statement in detail. Every month, financial institutions send an account summary, either physical or digital, which consolidates all the movements made. “It must be organized according to your budget, so that the plastic money is used according to what is planned so as not to exceed the use of the money I have,” comments the dean and professor of finance at the Universidad del Río, Francisco Parodija.

3. Ignore card discounts. Some cards include very attractive bonuses and discounts on purchases, which are valid even if you pay at the end of the month without interest. Or, for a large purchase, take advantage of a 3- or 6-month interest-free payment delay.

4. Do not save all payment receipts. If you don’t, refer back to this good practice to keep track of your accounts. It helps to have actual evidence of what is reflected on your statement. “Having an account allows us to analyze the situation, review the cost by cost, penny by penny. Use the new tools offered by the banks to compare your expenses compared to previous months,” adds Parodi.

5. Payment is late. If the cardholder is late in paying the monthly fee, on the scheduled date, the subject will charge a commission for the unpaid bill, which increases the value for the following month.

6. Not planning for future expenses. After determining the consumption patterns, it is best to define a personal and family budget. “It has to be defined whether it is possible to generate more savings capacity and be more efficient in the use of resources,” says Parodi.

7. Borrow a debit or credit card. In Ecuador, it is common for people to lend their card to family or friends to make purchases or withdraw money. It is important to consider that the card is for personal use.