Chapter P6, Problem 4RQ

To determine

The important rules to managing credit cards the right way.

Explanation of Solution

Following are the important rules to manage credit cards the right way.

1. Do not increase credit limit: As irresponsible credit can lead the borrower to debt therefore it's essential to not cross the credit limit.
2. Maintain a strict budget: As credit affects the credit score, therefore, it is important to manage the budget strictly and get continuous credit updates about its usage.
3. Repay dues on time: This is good to manage the credit card the right way because the remaining due amount will be carried forward which increases the stress to repay.
4. Keep the card secure: To avoid any fraudulent practice or scam, it is essential to make the credit card secure such as making payments through assured and authorized websites while shopping.

Economics Concept Introduction

Introduction: A credit card refers to an instrument that provides a credit facility to the user to make purchases through cashless transactions.