Credit Cards: Are You Using Them, Or Are They Using You?
Practical Advice For Using Credit Cards
Credit cards are practically a staple of the American financial system. The simplicity of swiping a credit card to make all of your purchases and then paying a single consolidated monthly bill is enticing. When used wisely, they can give you more purchasing power and protection; when abused, they can lead to thousands of dollars of debt, including mounting interest, which can take years to repay.
Are You A Savvy Credit Card User?
Do you follow a budget, and include credit card charges in your calculations? Do you pay off the entire balance of your bills monthly, and on time? Do you have a credit card that offers a rewards program?
If you answered "yes" to all of these questions, then you are a savvy credit card user. Your credit card use is helping you build a positive credit record, and you are getting something in return from the credit card company.
Did you answer "no" to any of the above questions, especially the first two? If so, then your credit card etiquette needs to be improved. Failing to include credit card purchases into your budgetary limitations leaves you vulnerable to overspending, and not paying off your balance or, worse, paying it late, results in an ever-increasing bill and potentially damages your credit record.
I'm Not A Savvy Credit Card User - What Can I Do?
If you need to pay off one or more credit cards, and regain control of their use in general, there are several steps that you need to take. First, assess your bills - balances and interest rates - and consolidate as much as possible onto the card with the lowest interest rate.
Stop using that card for regular purchases (this will continue adding to the balance that is used to calculate the interest), and focus on paying as much towards it as you can on a monthly basis.
Avoid the trap of only paying the minimum payment - this will cause you to be paying off debts for a significantly longer period of time. And, most importantly, tighten your budget, both so that you can put extra money towards your credit card bills, and so that you're no longer overspending.
If you can't control your charge purchases, switch to a cash system - you can't overspend your cash, and it will force you to focus on your priorities.
Becoming a savvy credit card user is a valuable life skill - they are practically an indispensable part of the American lifestyle and e-commerce.
Like mastering any life skill, it takes time to use credit cards wisely, but with time and conscientious financial management, you can become a credit card master!
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