Tips for using a credit card at Christmas

The use of debit and credit cards has increased in 2021 in Ecuador, according to an analysis carried out by the Association of Banks of Ecuador (Asobanca). As of April of this year, 6.4 million debit card transactions were registered, which represents a growth of 133% compared to the same month in 2020. (3.7 million additional transactions).

Having a credit card can be an ace up your sleeve in certain situations, however, if we don’t handle it properly it can become a headache, even greater when we have several.

According to the recommendations to have better financial habits of the Bank of America, before deciding how many cards to have, the lifestyle of each person.

Tips for the use of plastic money:

• Review the account statement always and in detail: Every month, financial institutions send a summary of the account, either physical or digital, which compiles all the movements made. “It should be organized according to your budget, that the plastic money is used according to what was planned so as not to exceed the use of the money I have,” says Francisco Parodi, dean and professor of Finance at the Universidad del Río.
• Keep all pay stubs: This is a good practice to keep track of your accounts. It helps to have real proof of what is reflected in the statement of account. “Having the vouchers allows us to do an analysis of the situation, review expense by expense, penny by penny. Make use of the new tools offered by banks to make a comparison of the expenses they make compared to previous months ”, adds Parodi.
• Analyze expenses with the support of specialized digital tools: This practice is very important since it allows you to identify how money is being spent, which areas or types of expenses are taking the most money and if they are fundamental areas or are unnecessary.
• Plan future expenses: Once consumption patterns have been identified, it is best to define a personal and family budget. “It must be defined whether it is possible to generate a higher saving capacity and be more efficient in the use of resources” indicates Parodi.
• Not lending the 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.

In the Christmas season, it is important not to lose your reason before the various promotions that are presented in stores. You need to determine which purchases are really necessary and which ones are out of budget.

Recommendations for managing multiple credit cards

Having several credit cards is not negative, if you are responsible with their handling. To avoid inconveniences There are some recommendations that we can take into account:

Always pay on time: Reminders or alarms can be used to pay on time and avoid inconveniences, using online banking can be helpful, since it will avoid us having to approach the bank.

Do not use all available credit: Ideally, you should always use no more than 30 percent.

Have the necessary knowledge to manage a card: At first, only try to have a credit card to learn about its handling, after about 12 monthly billing cycles, you could request another. (I)