Credit Cards For Personal Financial Management

Just ran through an article in Straits Times (13 June 2008 Edition). Inside it mentioned that credit card users that goes delinquent tend to be the following group of people.

1) Young Working Adults (between the age of 21-29)
2) Divorcee
3) Male

Credit cards are actually great tools for personal finance management. But credit card applications should be considered carefully. Holding too many credit cards might not be a good idea, given that you have to manage many accounts.

When considering to apply for any credit cards, be it Citibank or UOB, Visa or Masters, my recommendation is to look at credit cards privileges for instance discounts, credit card promotions with specific retailers, credit cards points for redemption and many more. Apply for a credit card that will give you the greatest benefit based on your household and personal expenditure. Thus this will reduce the credit card account that you need to manage.

Have a monthly budget on the amount you spend on credit cards. Using the consolidated credit card statement, to keep yourself informed if you have exceeded your budget. If you do, look at your income statement when you prepare next month's cash budget and see what expenditure you can reduce further, until you have a disciplined approach to using your credit cards.

Celebrate if you can have successfully maintained a disciplined approach, by having a good meal once in a while (because you deserved it), but remember, use your dining credit cards at your favourite restaurant and budget for it.

For more information, on using credit cards, please click here.