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What's your credit card lifestyle?

By Ben Woolsey

Everyone has a certain method or style of going through life, whether it's the cut of their clothes, the car they drive or how they decorate their house. The same goes with credit cards. Virtually everyone has a style with which they handle their finances, including the way they deal with their credit card spending. 

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Psychologists report that people develop their senses of style from an early age and often emulate the ways of people or groups that they either admire or wish to be like. This can certainly be seen in the way that teenagers dress and speak. And, depending on how a person's parents and other loved ones deal with their financial resources, a life long pattern can often be ingrained.

For example, if your parents were the types to live for today and spend like there was no tomorrow, there is a pretty good chance you grew to adulthood with a similar credit card sensibility. However, if you grew up in a household that watched every penny and paid every bill on time, you probably are not the type to revolve a balance from month to month.

While no particular style is good or bad, you shouldn't allow your spending habits to create a mountain of high interest credit card debt. If that occurs, it can be a prescription for financial disaster unless you can alter your credit card lifestyle. Credit cards can definitely provide immediate gratification, but unless you can pay off those resulting bills there can be terrible consequences.

Probably the most productive credit card style can be to leverage the power of cash back credit cards or other reward credit card programs, like those that involve gasoline rebates or frequent flier airline miles. This allows cardholders to literally get paid to use a particular issuer's credit card. All it takes is the discipline to keep the card paid off each month, and then the rest is gravy. By concentrating spending that might otherwise end up going to cash or check, those who seek credit card rewards can literally make hundreds of dollars back each year. This value shows up in the form of cash, free airline tickets or merchandise.

Understanding your natural credit card style is crucial in determining how to find the best deal when it comes time to get a new credit card. For those who pay over time, rewards credit cards probably don't present the best option. And, for those who wouldn't dare pay a dime in finance charges, low interest credit cards aren't really important. Those individuals should investigate what type of reward presents the most gratification for their card loyalty. Some people like cash, others like free gasoline and others still want airline miles.

Regardless of your credit card usage patterns, there is a card out there with your name on it. It's simply a matter of narrowing down the choices and comparing the best deals in your particular category.

Published: May 17, 2006


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