• Finory

5 Credit Cards Management Principles Every Credit Card Owner Must Know

Updated: Aug 18, 2021

Credit cards are sometimes deemed evil by many. Especially on social media, as horror stories like racking up big bills and high-interest rates are classified as buzz-worthy. But that couldn’t be further from the truth as it left out the biggest piece of the puzzle — the user.

The irresponsible swiping of credit cards is what gets people in trouble, not the companies in general. So, with that being said, there is no need to fear using credit cards. Credit card companies are not ‘out to get you’;, if you can learn how to use credit cards wisely, the benefits greatly outweigh using cash or your debit cards.

Before we get into the principles of proper credit management, it helps a lot to understand how it works.

How do credit cards work?

Credit cards are not cash. Instead, when you swipe your card (or tap with payWave), you’re using the credit card company’s money in advance. Then, of course, the credit card company will keep track of how much you’re spending and you’ll pay them back at the end of a month (depending on the policy).

If you pay your entire balance off in full, you won’t get charged with any interests at all. Even more, if you spend enough on your cards, your bank will love you and will provide you with discounts.

The danger lies when you don’t, or can’t (the result of overspending) pay off your balances. That’s when the companies can charge you interests. And that’s how credit card companies make a bulk of their money.

How to use credit cards wisely?

Pay your balance in full each month

The biggest, most obvious, and cannot-be-emphasized-enough way to avoid unnecessary interests is to pay off your balance in full each month. This includes making sure that you are able to and will force yourself to do it. And that includes not overspending that your bill is greater than your income.

Not paying your balance in full can also affect your credit score if you’re not careful with it.

A good way you can save when paying your balance is to strike whenever the bank has 0% easy payment, balance conversion, and balance transfer promotion. Essentially, that means the bank is allowing you to pay your outstanding amount (balance) via instalments. This way, even though you’ve gone out of your budget, it buys you time to fix it.

Don’t skip payments

Never, ever consider skipping payments. It’s a slippery slope that leads to a hole so deep it can take years to climb out of. Even if you’re cornered and do not have enough cash flow for the month, you should try your best and pay as much as possible. And then do the same for the next month, and the next, until you’ve completely cleared your balance.

Do whatever you have to. Consider going on a spending diet, balance transfers, and balance conversion.

Don’t have an abundance of credit cards

Quite often, the reason for signing up for credit cards owes to the benefits it comes with. Although it might be enticing, you shouldn’t chase those rewards because it generally requires you to spend more. Now imagine having to deal with five cards, chasing all the rewards at once.

Doing so will leave you financially and emotionally exhausted. Not just because it will suck your bank account dry, but because of having to deal with the intricacies of having an abundance of credit cards. Also, it’s worth mentioning as well that it can negatively impact your credit score.

So, resist the temptation from credit card companies. A few cards are all you really need.

Automate your credit card management

An underrated, or a rather modern solution to manage a handful of credit cards is to automate it. Have an eagle’s eye view of how much you’re spending and how much balance you have on each card. It saves you time and effort from having to do all of them manually, which can be a demotivating factor when it’s that time of the month.

The convenience factor and the fact that you don’t have to open 24 different PDFs just to keep track of your spending can help you plan your finances a lot better. The numbers are there before you even start to think about it.

For an app like Finory, it even lets you analyse your spending, taking it one step further for you to better understand your spending behaviour.

Use credit cards as often as possible

It’s become widely known that credit cards and much safer than debit cards, as you’re not exposing your own money yet. Even in the unluckiest situation where you fell into the dungeons of a scammer, you’re insured by your credit card company, and they’ll make sure to do everything they can to help the investigation.

But it’s more than that, using your credit card consistently and responsibly is one of the biggest contributors to a good credit score. This will, in the future, help you get your loans approved as you decide to purchase a home or a car. To put a cherry on top, you’ll also rake in tremendous amounts of reward points if you pick up the credit card lifestyle!


Wise usage of credit cards may require you to unlearn some concepts and may also require effort, but it’s a pearl of wisdom you need if you ever want to be financially free. Credit cards are a fantastic addition to modern society if you know how to use them well. Don’t shy away from them, learn about them.

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