One way to find a balance in the use of your card is to understand what are the ideal times to use it and when it is convenient to use cash. Credit cards are extremely beneficial for our finances, but that does not mean that we should use them at all times, since that could have a negative effect on our budget and make us spend more.
It is recommended that you use your plastic for medium and large purchases, and cover small expenses with cash. To understand why this is beneficial, there are three points you should know:
When using the card we do not realize that we are really spending money, however, when we take it out of the wallet and pay with it, we are 100% aware that there was an expense. Impulsive purchases are usually of small amounts and using cash to pay them will make us reconsider them more than once, taking into account whether they really agree with us or not.
A small expense on a large line of credit does not feel. In the same way, when paying for a meal or a coffee with the credit card, we think that it was not a great expense, because when subtracting it from our credit line of 2,000 or 3,000 soles, it seems that it was nothing. But when using cash it is impossible to ignore the expense and mentally go adding it. So, if you usually buy a coffee and a dessert every day, when paying with cash you will reconsider it, and you can even reduce your ant expenses.
Because carrying a large amount with you can always result in some theft or loss. That is why using the card for these expenses is ideal, as it gives you greater security. In addition, it allows you to assume a large expense without destabilizing your budget, because you can finance it in installments that do not prevent you from fulfilling your other obligations.
Finally, the card brings benefits that money does not, and through medium or large purchases you can take advantage of them better than when using it for a lot of small expenses.
Something you should consider is that if the expense is so large that it will occupy more than 80% of your credit card and it will be necessary to finance it in more than 12 installments, the card is no longer the ideal medium. In this case, it is recommended that you see other options, such as a personal loan, as it could help you save on interest.
Remember that new cards constantly appear on the market that could compete with your current plastics. The idea is not that you get more and more cards, but that you discover which ones are right for you and eliminate those that don’t. For that, you can compare the options in Jerosera Bertesas.