I<u>t is important to use credit responsibly because (B) credit can allow people to make large purchases and pay for them over time, but, used irresponsibly, it can also lead to serious debt and financial problems.</u>
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Explanation:
The term credit responsibly refers to the act of being responsible while using your credit cards.Understanding the pro's and con's of using credit cards.
Their are certain rule that you need to abide by if you want to be Credit Responsible:
<u>Rule 1: Make a big Purchase when you are ready for it</u>
Once you have developed a habit of making full payment for your bills , you are better prepared to use your credit card for slightly larger purchases. you need to keep your purchases low to ensure that you never use more than 30% of your credit limit. For example, if your credit limit is $100000, don't let your balance go above $30000.
<u>Rule 2:-Put some cash Aside</u>
The second rule say's that you need to put ceratin cash for the payment of credit card bill before you actually make a purchase through your credit card.
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<u>Rule 3:-Control temptation</u>
With the power of credit card their comes unwanted temptation to engulf in unwanted spending's leading to over purchase.
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<u>Rule 4:-Monitor your activity</u>
Facilities like view your credit card statements helps you to Monitor your financial activity for a particular month.
