Taking care of your family is far more expensive than providing for yourself. You discover that you spend way more than you used to as diapers, school supplies, and family vacations suddenly become things you need to sort.
Many parents turn to credit cards to pay for necessities as a way out. When used responsibly, credit cards can be great tools for financial support. However, when used carelessly, they can throw you into debt and hurt your credit score.
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On that note, here are five ways to use your credit card effectively and responsibly in your family life.
Earn Credit Card Points And Travel Rewards
If you are a family that enjoys going on road trips or vacations every year, it might be a great idea to pay your travel expenses with your credit card. A lot of credit cards offer you points or ‘rewards’ for making some purchases outlined by your credit card provider.
This can ease your travel expenses as these rewards often include cash back on your travel-related purchases. Some credit cards come with a one-rate cash back for all purchases, however, certain cards include more rewards for specific purchases.
For instance, the benefits of AT&T Points Plus cards include being able to earn points when you spend money on gas – which would be very helpful if you plan on going on a long road trip. In addition to getting three ThankYou® Points per $1 you spend at gas stations, you can earn $100 credit after opening an account and spending $1,000 in eligible purchases during the first three months.
There are also specific travel credit cards that let you earn rewards on your purchases in the form of points or miles. When used responsibly, these points can help cover some expenses for your next vacation. For example, some travel credit cards let you use your points to pay for a hotel booking or airline tickets during your vacation.
Some travel credit cards include insurance perks such as increased coverage on car rentals and lost luggage. If you are prone to losing your belongings or damaging your rental car, these travel insurance benefits can save you a lot of money.
Some also include trip cancellation insurance, which can come in handy if your family plans to cancel their vacation last minute. Note: I use TravelFreely, a free service, to find the best travel credit cards and keep track of my travel rewards programs.
Keep An Eye On Your Credit Card’s Expiration Date
All credit cards have an expiration date printed on the front, much like debit cards. This means that the card can only be used up until the end of the month on the expiration date displayed, after which it is no longer valid.
For example, if you have an expiry date of 01/12 (January 2023) on your SoFi credit card, that means your card will be valid until January 31, 2023. Make it a practice to periodically check the expiration date on your credit card; you can also set a reminder to ensure you don’t forget.
Your credit account remains active even after your credit card expires unless you decide to close it. Banks typically keep track of credit card expiration dates and notify consumers while some banks send you a new credit card in advance before your old one expires.
Additionally, you can go online and submit an application for a credit card renewal or go to the bank in person.
Avoid Late Payments
Keeping on track with your payments when running a family can be challenging, and one common error people make is paying bills beyond the due date.
Your payment history is one important aspect that determines your credit score and a late credit payment can result in a negative report on your record that can last at least seven years.
To avoid forgetting to make your payment, you can create a routine where you and your spouse sit together once a month to sort out all of your bills, especially your credit card payments.
Alternatively, you can set reminders and alarms for your due dates one day beforehand, so you don’t forget about them. Additionally, certain credit cards offer a feature called ‘auto-pay’ which automatically deducts your monthly payment from your linked bank account on the date it is due. If you think this might be helpful, make sure to check with your credit card company first
Also, making payments as soon as you know they are past due is best. A late payment won’t impact your credit score if it is resolved before the start of a new cycle. However, you may still be charged late fees or face some punishment for missing a payment.
Track Your Spending
Many card issuers provide tools that can be used to control personal and family spending. To keep tabs on your spending and that of your family, you can set up online access to your credit cards and bank transfers, but also beware of scammers.
Your family will be less likely to overspend or get unforeseen costs at the end of the billing cycle if everyone is aware of your account balance.
Each monthly statement for a credit card includes a record of all purchases made during the previous month, and you may also keep track of any actions that haven’t been billed yet.
Additionally, year-end summaries show you how and where you spent your money which can be helpful come tax time.
If you want more control over your spending, some banks offer credit cards that allow you to set daily, weekly, or monthly spending limits. You may also choose to receive alerts via text or email when you reach a certain limit or when you’re getting close to your credit limit. You might be able to set up phone or email reminders for due dates, low balances, or withdrawals. These can be very useful for keeping track of your spending.
Teach Your Kids To Use Credit Cards Responsibly.
Your kids have probably seen your credit card or observed them in movies. It is better to teach your kids how to use them when you think they’ve gotten to an age where they will understand before they start using one.
Most times, kids use their parent’s credit cards with permission to secretly pay for items before they have personal cards. Things can get tricky when they go overboard with spending or make unauthorized purchases.
Explain to them that a credit card comes with a limit set by the financial institution that issued it and the money in it isn’t theirs, therefore they can’t afford to spend carelessly. Help them understand that when you swipe that card to make a purchase, you’re borrowing from the limit set and will have to pay back fully before the due date.
To them, a credit card can look like a tool to purchase all that they desire. Let your kids know that they can’t buy everything they want, at least not yet. Rather, they should focus on buying necessities and things that they can afford. Explain to them that a responsible way of using credit cards is to stay below your limit as this will in the long run help to improve your credit score.
Greenlight
For many adults, using a credit card responsibly is an essential part of managing their finances. However, teaching kids about responsible credit card usage can be a challenge. Debit card companies like Greenlight offer a solution by helping parents manage their children’s spending. Greenlight allows parents to set limits on how much their children can spend and where they can spend it. This can be a valuable tool for teaching kids about budgeting and making thoughtful purchases.
In addition, Greenlight provides parents with insights into their children’s spending habits. This can help parents have more meaningful conversations with their kids about money management. Ultimately, using a company like Greenlight can be a helpful way to teach kids about responsible credit card usage.
Bonus – Sign up for Greenlight and get $30 today!
In Conclusion
Credit cards can be a useful tool for managing finances, but it’s important to use them responsibly. Track your spending, set limits, and teach your kids about responsible credit card usage. By following these tips, you can help ensure that your family uses credit cards responsibly.
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