For as much trouble as they can get people in, credit cards can come in handy when used properly and responsibly. The problem with credit cards is that people often don’t have enough control or disciple to use them without getting into debt. If, however, you can be disciplined, a credit card can provide positive benefits. For example, many credit cards have rewards programs, or cash-back offers. Also, credit cards can provide more security than cash or debit cards. If you decide that you can handle the responsibility of a credit card, here are some useful tips to help you manage your use.

1. You manage the card, don’t let it manage you. Remember that it is your money, so you, not the sales at the stores, decide how much you can afford. Be assertive and deliberate in budgeting your monthly expenses. Use your credit card as a tool; don’t let it control how much you spend.

2. Pay attention to your monthly statement. Watch out for changing interest rates and always read the fine print. Credit card companies can change the terms of your agreement as long as they give you 15 days notice, so read everything that comes with your statement each month.

3. Pay your balance in full each month. Don’t be fooled by the large number printed at the top of your statement. Find the total balance, not just the monthly minimum payment. If you only pay the minimums each month, you will pay for your purchases at least twice over because of all the interest that accumulates. If you pay your full balance each month, however, you are never paying any interest.

4. Treat your credit card like a debit card. Keep track of how much you spend on the credit card and subtract it from your bank account balance as you go. Never spend more than you already have, thinking that you can pay it off later. That is the first step to debt.

5. Make sure your payments are never late. Credit card companies make the majority of their money on late fees. Also, when you make a late payment, your interest rate on the credit card often rises.

While credit cards can be much more complicated than this, following these few rules of thumb will save you a lot of stress and debt down the road. Having a credit card with an available balance can be important in emergencies and for unexpected expenditures, so be strict with your spending. You will find that life is a lot less stressful when you, and not your credit cards, are in control.

This entry was posted on Thursday, January 12th, 2006 at 6:59 pm and is filed under Credit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.