Valeriu Mîrzac, student, University of Nebraska
Keywords: managing, credit, money, bank,
Management is the most powerful tool nowadays. It is the coordination and administration of tasks to achieve a goal. We need to understand that, if we want to be a good manager you must operate with five basic functions:
Stick to a plan,
Keep your credit cards in a safe place,
Understand the card transactions,
Manage your card, Dealing with balance.
Learning this skill makes us more powerful and we can understand the concept of credit. Credit is issued to people who want to obtain something now, or don’t want to necessarily pay for it now, based on that person’s ability to pay for it later. Credit is the measure of trust one party has in another party’s ability to receive resource now and pay for it at a designated point in the future.
Credit is the ability to borrow money or access goods or services. After we understand this concept, we can talk about how to manage our credit and why it is so important. Credit or the idea to borrow comes from many years ago, and in return people gave some goods or money. It is very popular to open a credit account and use the money from there, but the problem starts from the moment you create this account. Before we open an account, we need to understand the benefits bank offers and what is the policy. When we use the money, bank offers us a credit, it is not a gift and nor a bonus. It is just an opportunity to use them if you don’t have any other resources at the moment. It is important to understand that bank is never going to lose that money, that’s why they count every cent you spend and give you a statement at the end of the month. Statement is an official document that you must understand how to read and manage. The total amount on the statement is basically all the amount you owe to the bank.
Paying the statement in time is critically important because otherwise bank will profit from that amount by increasing it with a certain percent that they listed in the contract. That’s why before accepting and signing all documents be sure to read the terms and conditions so you can make the right decision. If and only if you can’t pay on time you need to understand that every month the amount will increase so it is best to have your plan set up or never reach to this point. The best way to manage your money is to create a table either in excel or any other platform and design it for you. Understanding what you created will be an easy game play. Tracking your spendings every day can help you see what’s your statement before the bank gives it to you. Moreover, you can plan the budget and how much money you must spend.
In conclusion:
I would like to state important steps to follow regularly on manage your credit without any experience:
Why do we need it?
Understand the terms and conditions before signing a credit.
Create a spreadsheet to manage your spending’s.
Plan for the next statement.
Pay on time.
Reference:
1. What Is Management? Definitions and Functions, Indeed Editorial Team, December 8, 2021, https://www.indeed.com/career-advice/career-development/what-is-management
2. Glossary, Discover the definition of financial words and phrases in this comprehensive financial dictionary, https://www.bankrate.com/glossary/c/credit/
3. Akin, J. (2020, March 9). What is credit? Experian. Retrieved January 28, 2022, from https://www.experian.com/blogs/ask-experian/credit-education/faqs/what-is-credit/