If you don’t use credit wisely, you will end up in more debt. Now it’s time to get credit smart.

Credit is part of our lives and is often associated with unmanageable debt.

Typically, credit has strict terms and conditions. If you don’t use it wisely, you could quickly accumulate debts that you’ll have issues paying back.

If you pay on time and become credit savvy, not only will you avoid more credit interest, you’ll remove the stress often associated with credit debt.

To remain in control of your borrowing, here are a few ways to use credit wisely.

Use credit cards wisely

Credit cards are an easy way to pay for goods you want, but this freedom can come at a cost.

It can be effortless to rack up more credit card debt than you can afford to repay, so it’s crucial to remain in control.

The top way to do this is to monitor your spending and that you are checking your credit card statement regularly.

When you receive the credit card statement, review the date the payment is due, and ensure you pay the minimum payment time. This will avoid additional interest charges or substantial late payment fees.

Consider setting up a direct debit to pay the minimum amount off the balance owing each day you get paid. Just ensure these payments do cover the minimum monthly payment due on the card.

Don’t borrow more than you need

Before you sign up for more credit, it makes perfect sense to consider whether you need to borrow the money in the first place.

With the current economic uncertainty and rising household bills – many people are now choosing to pay back the money they’ve already borrowed rather than borrow even more.

There are some fundamental topics you need to answer before you borrow money.

Ask yourself if:

• Do you need to spend the money?
• Do you have other alternatives for financing the purchase?
• Can you afford to pay back the money you’re planning to borrow?

Compare all competitors

If you have to take on more credit, ensure you consider all the alternatives. A couple of years back there was a surplus of fast credit providers including QuickQuid, Peachy, Wonga and OnStride.

Now out of those big lenders, only Peachy remains. Ensure you examine all the Peachy alternatives, so you are fully educated if there is a better prospect out there for you.

Never miss a repayment

Whether you like it or not, your credit report tells a story about you. It can tell a happy one when your payments are made on time – you’re somebody who can manage your current credit debt and probably more if you need to borrow further.

With this in mind, keeping an eye on your credit score is crucial. Correspondingly, you can learn more about the benefits of carrying out a regular credit report by taking a look at these credit sesame reviews for example. But having a poor credit score, or no credit history whatsoever, isn’t a total barrier to getting a loan, if you need to – the process might just be slightly different for you. You could, for example, consider getting a credit builder account which will not only give you the money you need but will also help you build a better credit score, making your chances of getting financing in the future more likely.

Repay your credit as fast as you can

Debt counsellors often point out the wisdom of paying back more than the monthly minimum amounts on your credit. Otherwise, it will take a long time to pay off your credit and will cost you much more in interest.

Carrying debt for too long, even if you’re hoarding it to boost your wealth, can quickly begin to feel like a burden.

Most of us never have the money to pay for everything we want now, whether it be a house, car, holiday or tuition fees.

Credit can help fill the void, but that’s money you will need to pay back, always with interest. Typically, the faster you repay, the less you’ll owe in total and can be debt-free.

About the author

David Bailey-Lauring is a single father of three boys and a content writer and regularly writes about personal finance, business, education and tech in the UK, USA, and Europe

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