Responsible Credit Card Use

I learned about responsible credit card use the hard way. Since then, it's become part of my mission to make sure other people don't suffer the same problems I did. Credit card debt is something that can get out of control very quickly, and it can literally ruin your life. Take steps to prevent those problems before they happen.

Practicing responsible credit card use

If you're not careful, credit card debt can get really out of hand really fast, and if it reaches a point where you can't make payments, bad credit can impact your entire future, from whether you can get a job to whether you can buy a house. Don't let debt get control of you. Instead, use these tips for credit card use.

1. Have one main credit card, and at most two secondary cards -- preferably none. If you always use the same credit card, it's easy to keep track of how much you spend. If you unexpectedly hit your credit card limit, you know it's time to back off. But if you're spreading your purchases between four or five cards, you can be in for a nasty surprise when statements arrive.

2. Don't ignore debt -- always make minimum payments, and make them on time. Late payments and missed payments go on your credit record, and the last thing you want is bad credit. No matter how difficult it is, make sure you make those monthly payments.

3. Know your credit card interest rates. It's amazing how many people get store credit cards for the perks they offer without realizing the astronomical rates on those cards. Store cards can have 10% (or more) higher interest than generic cards. Know your credit card interest rates and choose your main card accordingly.

4. Set your own credit card limit. Just because your actual credit card limit is $5,000 doesn't mean you have to try to reach that number: it's a maximum amount, not a challenge. Pride yourself on using your credit card rarely, and preferably only when you know you have the cash to back the purchase.

5. Avoid online impulse buys. It's very easy to make fast, expensive purchases online, and they're hard to return because you'll have to pay the shipping costs. When you find yourself tempted to make an online buy, especially if it's one you weren't planning, enforce a mandatory 24 hour waiting period before making the purchase. If you didn't know you needed it, 24 more hours shouldn't matter.

If you follow these tips, you can build a solid credit score while avoiding unnecessary debt. Take pride in your ability to practice responsible credit card use.


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