Credit Cards: Why They Aren’t So Bad And How To Use Them

Credit card companies have long had their schemes for getting you to sign up with them. They implode your mail box with offerings, they offer you free food in college if you just sign up, and they have catchy commercials that capture your attention. They do all of this so that they can charge you exorbitant rates and get your money. But the problem is not with the credit cards, but with how you use them.

Credit is a double edged sword. You need good credit for so many things, getting a loan, buying a car or house, and even getting a job in some cases. However, credit is using money you don’t have, and many people every year get into so much debt over credit cards that counseling companies have sprung up all over the place to help people. Here are some valuable tips to help you keep from getting over your head, and manage your credit cards wisely.

One of them is to pay of your cards completely every month. This means that you should only make purchases from the card you know you will be able to cover, otherwise you have to pay interest every month. Make sure that you make your payment on time, every time. If not, late fees can be applied, which can be more than thirty dollars. This also causes your credit score to drop, and your interest rates higher.

Look, realistically, not everyone can pay off the whole thing every month, it’s understandable. If you have to just pay your minimum balance, make sure that you add at least five to ten dollars to it, even if you have to split it up over the month. When you are paying minimums, part of this money goes to interest. Paying a little extra a month goes directly to the principle.

Just because you have a credit card, doesn’t mean you have to use it all the time. A credit card purchase should be well thought out, and not used frivolously. You shouldn’t take yourself on a shopping spree, but you should use it to purchase that refrigerator your family has been needing, but just don’t have the cash on hand. Stick it in your wallet and think of it as an emergency ‘get out of jail free’ card, one that you will only use it when you are broke down on the side of the road and need a tow, or have to pay for some part in the middle of nowhere.

You can find out more information online about a variety of credit card topics. If you are interested in building your credit using credit cards, it is a good idea to shop around and really look at what each card offers in the way of benefits. You need to make sure that you get the lowest interest rates, and read all the fine print about over limit fees, late charges, and financing fees. You need to be clear about everything you are getting into, because you can’t use the excuse that you didn’t know.

Dorthy Weatherbush and her husband try to make good financial decisions for their family. That’s why they send money to their son in college using Xoom.com. With Xoom.com they don’t have to worry about their son spending money he doesn’t have.