Using Credit Cards in the Economic Slump

For some of us, credit cards are an occasional convenience. For others, they're a necessary way to stretch our budgets in tough times. And for others still, they're an economic disaster waiting to happen.

Times are tough, and many people are using their credit cards to help them through. That's fine within reason. However, there are a number of ways you can make sure your credit cards don't break you -- and sometimes even save you money.

Choosing and using credit cards

Here are some tips to help you get the most from your credit cards.

1. Choose low interest credit cards. It might seem obvious, but it's amazing how many people don't even check the interest rates before signing up for a card. And that's at least partially because the cards don't want you to check. They emphasize their perks, not the downsides. Choosing low rate credit cards is the single best way to save.

2. Choose credit cards without an annual fee. Some people say the best credit cards are the ones you pay for, but that's only true if you put thousands and thousands on your credit cards all the time -- say, for business purposes. For most of us, low rate credit cards with no annual fee are the way to go.

3. Pay your bill on time. Make at least the minimum monthly payment. If you can pay more, then do it. Credit cards make their money on interest, and they will happily sit back and watch the money flow in.

4. Use credit cards responsibly. A limit is exactly that -- something you can't go over. It's not a challenge you should try to reach each month. Try to avoid using your credit card unless necessary, and if you know you're prone to overspending, don't carry it with you.

5. Make sure your card gives you something. The best credit cards offer cash rebates, but you can also get cards that give you points for free groceries, gas, and other necessities. Don't worry about things like air miles. The best credit cards give you immediate, concrete benefits.

6. Don't ignore credit problems. If you can't make your payments, the single worst thing you can do is close your eyes, ignore the bills, and keep spending. As soon as you realize you can't make even the minimum payments, it's time to stop using your card. It's also time to call the company and explain your situation. Companies are surprisingly willing to work with you, and that simple call can save your credit score from ruin.

These six easy tips will help you manage your credit during economic slumps. You may need to use your credit card, and that's fine. Just keep your spending under control and use your credit cards wisely!

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