How can some Credit Card Holders Sleep Peacefully at Night?

How does one become a responsible owner of that seemingly infinite ‘good as cash’ card?

To hold on to your credit card is a great responsibility. Yes, it seems most are aware of this and are mindfully taking control of this responsibility, however, why is it all too common for many people to land in extreme debt, just by carrying that piece of card in one’s wallet? Below are 10 Golden Rules credit card holders must abide by if they wish to avoid those sleepless nights.

  • First of all, know and understand the terms of your credit card agreement. Be especially aware of the due dates of your loans or credit card. Know also the finance charges that will be imposed upon you when you miss a payment, so that you’ll seriously avoid missing it.
  • Set a monthly limit for credit card transactions and stick to it. When you set a monthly limit, you are basically ensuring that you do not spend more that you can afford, which leads us to the next item.
  • Do not spend more than what you can repay. I mean, it’s plain common sense. why would someone spend more than what he has?
  • Pay bills promptly to avoid penalties. If possible, do not wait ’til the last minute of your due date. Doing so will do your mental health a favor, as you relieve yourself of the burden of constantly thinking of your ‘floating’ debt,  plus, it’ll save you from forgetting to pay and being charged a hefty penalty for it. Pay at least the minimum payment due on time every month to avoid the penalties.
  • Don’t take on more monthly credit payments than you can afford. Monthly payments, like utility payments, are sometimes necessary, but car and gadget loans and all other unnecessary ‘want’ loans can sometimes overwhelm you when making your monthly payments. Figure out what needs to be taken our of your monthly credit card payments and as much as possible avoid enrolling new monthly payments to your credit card account.
  • If you charge day-to-day expenses, make sure you pay down enough monthly to keep your debt from ballooning. Also keep track of your expenses, as those small charges can accumulate big time if you don’t keep track.
  • Have an emergency fund. If you have cash on hand for emergencies, the less likely you’ll be led into swiping your card which is uncalled for.
  • Keep copies of receipts and compare charges when bills arrive. If there’s a mistake, call your credit card company right away.
  • Keep your credit card information in a safe place, and also keep the contact details of your credit card provider always at hand (e.g. saved on your smartphone) so you can immediately contact them in case you suspect theft or fraud of your credit card.
  • Lastly, treat your card as cash! Spend as you earn, and do not borrow in anticipation of future earnings.

If you’ll ask me, I’m the paranoid credit card holder type. In an extreme way, actually. I pay my credit card provider through online bank transfer right after I swipe my card. I actually cannot fathom the idea of myself sleeping the night away knowing I have a floating debt (click here for my blog post on the 7 Deadly Sins of a credit card holder). Haha! Having said this, it only means that I swipe my card only when I have an equivalent cash already on hand (treat your card as cash, right?). This, my friends, is the reason why I always sleep soundly and peacefully at night.



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