Identify & escape from credit card debt.

Credit card is a popular form of plastic money that has taken an important place in the financial picture of many. Though a credit card comes with various benefits, one of the most popular ones that attract credit cardholders is the credit card reward. These rewards are offered in terms of cashback and reward points made on purchases. However, there are some things which must be kept in mind before availing any attractive reward that the card offers. These are listed as follows:

Ensure making monthly credit card payments: A credit card comes with an obligation to pay off the monthly bills as per the requirement. The credit card bill payment is based on the amount and number of purchases that the cardholder makes in a month. In case a person fails to pay the bill on time, then he or she is bounded to pay the interest charged on the bill. Thus, you must pay the bill regularly every month, to make the best of your rewards, otherwise its nothing but a waste.

Be aware of the requirements: At times, the reward offered on a credit card are subject to specific terms and conditions. For instance, one is required to make regular minimum balance requirement per month. However, cardholders usually get in this trap and end up spending more to earn a reward. Thereby, you mustn't end up following the conditions blindly. 

Know the worth of the reward: Before going on and looking out for any reward, it is better that you examine how worthy the reward is. For instance, at times, the reward is offered on privileges like travel, airline tickets, or hotel accommodations. But these could be of no use if you are somebody who does not travel frequently or unless you can make your plans flexible enough as per the validity of the reward points. Thereby, you must access the worth of the reward points before being hungry about it.

Know the value of the reward: At times, even when a reward point can be beneficial to you, it is better that you know and researches, how much benefit will that reward offer. Also, while these rewards may seem enticing when offered on a regular basis, yet it must not be ignored that many a time, various credit card providers may charge an annual fee for the reward. 

Thereby, on a concluding note, it is important that you understand, that while rewards are a beneficial thing to hook on to, that can help one make easy and convenient purchases. Yet, knowing the reality behind these rewards is important. Being aware of the terms and conditions, associated with the reward points, will help all the credit card holders make a wise and thoughtful decision with their plastic money. Thus, identifying the reality and the risks associated with a credit card will help one escape a bigger financial trauma. 

Summary:

Though a credit card is a popular household name in the present era, yet, not many are aware of the proper use of it. Thereby, the misguidance on a credit card often lands people in debt. A credit card offers various benefits like reward points and discounts. These often make people fall greedy for them; however, there are some points that one needs to be sure off, before falling for such benefits. These are listed as follows:

• Making monthly payments on credit card bills is advisable before availing off any rewards and discounts. In case one fails to pay off the bills every month, then one is bounded to pay off the interest on payments and purchases. In that case, the rewards are of no use. Similar to paying off the credit card bills, it is important that one is aware of meeting the requirements to earn the rewards. Earning rewards on the credit card bills is oblige to conditions like paying off the minimum balance requirements. Thereby ensure fulfilling them.
• At times, the rewards and discounts are provided to credit cardholders on various selected brands and items. Thereby, before going in and availing any reward points, it is better that one ensures whether it will be of their use or not.
• Though a reward point is offered as a benefit to the cardholder, yet at times the card issuer charge fees and charges from the cardholder in advance, to provide these rewards on a regular basis. Thereby ensure being aware of the same.

On a concluding note, it must be kept in mind, that the main reason behind falling into the credit card debt, is the rewards offered on them. Thus, being aware of the above mentioned might help credit cardholders from falling into the debt-trap.