Ways to Properly Use a Credit Card

Most people will agree if it is said that anything that is excessive will not be good and can lead us into a number of problems and difficulties. This also applies to credit card ownership, where the more cards we have, the more difficult it is for us to manage and also control its use.

It would be very wise if we only have a number of credit cards that we really need, and that way we do not need to save the risk of misuse or inadequate use of these cards. Check out a few points below, related to the use and also the management of credit cards correctly.

Avoid Debt

Avoid Debt

When we have a credit card for the first time, then we must have full awareness of the amount of funds contained in it. Credit cards are not loan facilities or extra funds provided by banks for free.

Understand well that all transactions we do with credit cards are debts that we must pay if the bill has arrived. Use credit cards that provide maximum benefits and are issued by banks that you can trust.

Avoid Using Many Credit Cards

There is no point in having multiple credit cards. This can actually trigger us to make a number of unnecessary expenditures and incur some debt in the future. Think of using only 1 or 2 of the best credit cards that provide many benefits. Avoid unnecessary purchases by using a credit card that we have. Do not shop with a credit card, if you do not get a number of benefits.

Adjust Credit Limit with Revenue

It would be very wise if we only use credit cards with the right limits. That is, the limit is in accordance with our income. Do not let us have a number of credit cards whose limits are very far away or tens of times the amount of our fixed-income each month. This is very dangerous for our finances, especially if we have difficulties in controlling spending.

Cover unnecessary

Cover unnecessary

There are times when banks provide credit card facilities very easily, even when we only make careless proposals (not so hopeful). Things like this can make us have a number of credit cards that are not utilized to the maximum, and this is not good for your finances.

Make a closing on a credit card that is not / rarely used, then choose the credit card that provides the most benefits for us. This closure can be done by considering several things such as the amount of interest charged by banks, offers and features provided by banks, various kinds of costs that we have to pay, and also various kinds of benefits that we can get.

Do Closure Gradually

If we have a plan to close several credit cards that we have, then do not do it all at the same time. This will affect our BI Checking. Do the closing in stages, make a gap of several weeks between closing one card with another card.

Use Alternately

When you have several types of credit cards, you can be sure that you will have one favorite credit card. Usually, this is the credit card that we will use most often in various financial transactions that we do. This is not good, because automatically we will very rarely use other credit cards that we have. Rotate the use of credit cards that we have, use these cards regularly and take turns so that all cards can be used.

Choose the Card with the Lowest Interest Rate

Choose the Card with the Lowest Interest Rate

Each bank will certainly implement various policies in the credit cards they issue, including in determining the amount of interest rates that they charge on the credit card. There are many banks that offer interest rates that are quite low for their customers, and we can consider that especially if we have the habit of not paying off all bills every month.

Ask for Limit Increase

Small limit and never go up for some time. This is one reason for many people to use more than one credit card in their lives. The point is only one, the credit limit provided by the bank is not sufficient for various financial transactions carried out. This certainly becomes a problem, especially for those of us who have a number of solid financial activities.

Don’t hesitate to ask for an increase in the limit on the credit card issuing bank that we use, especially if we have been their customers long enough. But if the bank refuses to increase the limit we ask for, then it never hurts to replace the credit card with a credit card from another bank that is willing to provide a bigger limit.

Avoid Use to Exceed Limits

Don’t use a credit card until you reach your maximum credit limit, things like this will only make your credit score worse. Use a credit card at a reasonable limit, around 40% of the limit given by the bank.

Pay Off All Bills

Pay off all purchases and also the various costs incurred on our credit cards, especially annual fees. Do not let a number of debts and arrears make our credit score bad in the eyes of the bank.

Fulfill Obligations as a Card Holder

Whether or not we succeed in managing the credit cards that we have, will certainly depend on the mindset and lifestyle that we live. Credit cards are banking facilities that are provided with the aim of facilitating various financial transactions, lest this makes it difficult for us in the future. Use wisely and pay with discipline.


What can mediation organizations do in the event of over-indebtedness?

You have contracted one or more credits and for various reasons, you are having difficulty in meeting the reimbursement of your monthly premium.

You are in some way in a situation of over-indebtedness and you would like to turn to an active mediation organization in matters of credit and over-indebtedness.

Let’s take stock together on this issue.


Prevention is better than cure

credit loans

It is first and foremost the essential role of your credit broker to build with you a reasonable credit report. It is a prudential policy which consists in making your broker the first of your advisers. Everyone has limits and when it comes to credit, this truth is also true.

In this regard, it is up to you to be honest with your broker and not to conceal from him information that would give another image of your financial situation. Willfully deceiving your broker is also liable to criminal prosecution because this behavior generally highlights false documents, uses of false reports and false statements which can be prosecuted in court.


Monthly default: end of access to credit

credit access to credit

If you are no longer able to repay your financial installments for two monthly payments, the first sanction will be administrative. Your lender has the legal obligation to report your credit to the Cream Bank. This means that your file is in dispute and that you must reimburse your entire loan immediately to the credit insurer. In addition, you will be registered with the Cream Bank, which will close your doors to credit for a period of 15 months.


Special situation for companies, the self-employed and the liberal professions

self-employed loan

There is a mediation body for companies, the self-employed and holders of liberal professions. The SME Finance Knowledge Center (CEFIP) can help a company, a self-employed person or a holder of liberal professions to have access to credit to alleviate a situation of temporary cash shortage. In this case, the problem is different. It is not a question of dealing with a default in the reimbursement of monthly premiums but rather of finding common ground between a bank and an entrepreneur so that the latter can have access to credit.

Currently, given the credit crisis, banks are sometimes more cautious in granting credit. In this case, CEFIP can help you try to solve a temporary situation.


Collective debt settlement

debt settlement

CEFIP does not intervene for individuals. Consequently, that you did not contract a loan within the framework of the exercise of your profession but within the framework of your private life, the situation is different.

The Legislator has provided for a law in Belgium to protect individuals who find themselves in a situation of over-indebtedness such that they could no longer face the reimbursement of their monthly premiums and could no longer lead a life in accordance with human dignity. This is the law of July 5, 1998 relating to the collective settlement of debts.

If your request is accepted by the labor court, you will be appointed a debt mediator who will establish a collective debt settlement plan.

The purpose of the collective debt settlement plan is to restore the financial situation of an over-indebted person. He must allow him, as far as possible, to pay his debts, by guaranteeing him and his family a life worthy of human dignity.

The collective debt settlement plan can be amicable or judicial.

  • Amicable plan: it is negotiated by the debt mediator with all of your creditors; if all the parties agree, it is approved by the judge.
  • Judicial plan: in the absence of creditors’ agreement on such a plan, the judge may impose a judicial settlement plan with a maximum duration of five years.

A judicial plan may include the following measures

  • Rescheduling of debt payments
  • Reducing interest rates
  • Suspension of the effect of foreclosures, as well as assignments of receivables
  • The remission of indemnities and costs
  • Any other accompanying measure, such as budgetary guidance, the obligation to undergo a drug treatment, etc.

If you are experiencing serious financial difficulties and can no longer cope with your debts, it is advisable to contact an approved center to practice debt mediation (CPAS or non-profit association).