Staying out of trouble with credit cards
By Ben Woolsey
Isn't it great having a credit card? It gives you so many advantages. You can purchase items online, make hotel and car reservations, and so many other convenient things. Despite these advantages, credit cards can create a lot of problems for some people. The way you use a credit card should be taken seriously. The following are a few tips and suggestions about credit cards that can help take some of the disadvantage out of the credit card experience:
- Credit cards are like loans. You have to pay what you owe. So, don’t overcharge.
- Track how much you spend on your credit card. Always know your exact balance before going out. Little $20 purchases here and there add up.
- Keep your credit card receipts and compare them with your monthly bill. If there are any discrepancies, report them to your credit card company immediately.
- Don’t give out your credit card to ANYONE, including friends and family.
- Don’t owe more than you can repay. This can damage your credit and hurt your chances of getting a car loan, mortgage, insurance, or even a job.
- Pay your bills on time. If not, you will incur finance charges and interest charges that may make it hard for you to pay back your loan.
- If possible, pay your bill in full every month.
- You are liable for $50 of unauthorized charges per card.
- Don’t pay off one credit card with another. This will lead you down a spiral of mounting credit card debt that you may never get out of.
The way you use credit cards is in how you think about them. We want to offer some credit card tips that might help you change the way you look at credit cards:
- Think of a credit card as a 30-day loan that you have to pay back.
- Act as if you are paying with cash. Don’t spend more than what you would spend if you had cash in hand.
- Go out without your credit cards. When you see something you like, go back home and get it. If you still think you need that item, then by all means buy it. But if by the time you get back home, you don’t think it’s important enough to go back for, let it go.
- Pay with cash, and think of your credit cards as insurance. A credit card can bail you out of many situations when you're out of cash, but it can help rein in spending if you avoid using a credit card for everyday purchases.
These are just some credit card tips that will help you stay out of trouble with credit cards. In this world of buy now-pay later, it is important that you understand the heavy responsibility of credit cards. Behind the plastic is real money and real debt. So, you should take credit card usage seriously.
We hope these credit card tips have helped you to better understand credit cards. By following these tips and changing the way you look at credit cards, it will help you to stay clear of credit card debt.
Published: July 12, 2005
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