Good credit card management is, for many, the most important indicator for accessing bank loans on better terms in the future. Everyone who has had a relationship with a financial institution has used the plastic money, either for their first purchase of a cell phone or buying stuffs online or travelling because they offered incentives such as miles to travel or points to redeem for future purchases.

Over time, however, some bad habits create a damage to the credit history. There is a temptation to take advances with credit cards without paying attention to the fact that each bank charges a fee for this transaction and the current interest rates on this money are the highest for consumer credit and that if there is default, the moratorium rates are equally disastrous for any pocketbook.

You become parents

Parents who are new to their first baby don’t think much about all the changes that the new family member will bring. And they believe that life will continue as it was before and they will continue to go to those fancy restaurants, that they will find a way to keep traveling with the baby in their arms and they will continue to travel the world. That’s probably not the case and that’s why they should also check their credit card for a discount for their new needs.

Instead of that plastic to earn miles, choose the one that gives discounts on baby items or benefits on newborn clothes or milk jars and diapers. And if such cards are not available, look for a card specially made for shopping. Although, looking for discounts on diapers/shopping cards, will be less sexy than saving for that trip, but you will see that it will serve your finances better.

Your card is stretched over the limit

The misuse of credit is very costly. Over crossing the credit limit carries a very high interest rates which ends up affecting your credit history. If you are hung up on the installments you have the option to refinance with the bank, although this may generate new interest and lengthen the repayment of the debt. If you become delinquent the next month, your credit history may be affected.

Another option is to ask for an increase in the limit. But if you’re already hung up on the one you have and you’re lousy at managing your finances, you’re likely to be tempted to make a new advance to open up one more hole in your pocket, without having covered up the old one. Or finally, sell the debt to another bank. There are many entities offering card balance transfer at lower rates. But as long as you improve your situation, hand over the cards and end up paying off that debt.

Your credit card is from a private company

There are many private credit cards i.e. usually an agreement between banks and large supermarkets/others. The discounts or offers are specific to those companies only.

The problem is that if you accumulate points on one side, they may not work for you in another shop, and that’s a bit of a disincentive for the buyer. So before opting for such a card, check the policy carefully so that there are no surprises with your use of your plastic money.

No longer meets your financial objective

Credit card is not a’souvenir’, nor a reminder of anything. It is a means of payment and that’s it. See if the bank offers you a product that has a more favorable interest rate for your financial situation. There is no point in sticking to a card that may be obsolete and that does not even bring the minimum security to your finances.