Best Way to Use Credit Cards

The society of today is built on plastic — the “charge and go” kind.  It makes you wonder what people did before credit cards were invented!  With those plastic wonders has come a mountain of debt.  If this applies to you, to keep that debt from growing any larger consider giving your plastic the boot.

Did you know that some credit cards carry an interest rate as high as twenty-nine percent?  You wouldn’t want an interest rate that large on your home or car, so why settle for it on your credit cards?  For those credit card companies that offer a super low interest rate at the beginning, if you miss one payment, the interest rate jumps up to around a whopping eighteen percent or more.  Read the fine print.

Credit cards are a way of establishing credit.  Purchasing items and making payments on time lets potential credit lenders know that you are an acceptable risk for them.  Good credit helps people to qualify for low interest loans on houses, cars, and furniture. 

But that good credit standing can quickly change if you begin to charge more on those credit cards than you can possibly pay back.  Interest is tacked on each month that the credit card carries a balance.  It may be only a few dollars now, but let the balance linger for a few months and you will see the difference. 

Using credit cards for intangible things encourages debt.  It is convenient to purchase groceries, gas, pedicures, and other services on a credit card, but in a few weeks there will be nothing to show for it.  When the bill comes, the food will have been eaten and the gas gone from the tank. 

There’s no need to get rid of all of the credit cards.  Keeping one card is okay for emergencies.  We’ve all had the odd bit of car trouble now and then.  Or, even worse, something happens to the heating unit or something else in the house.  A credit card provides emergency money for the types of things that are unexpected. 

What about the other cards?  Cut them up!  As soon as the balance reaches zero, call the credit card company and cancel them.  Be aware that the representative will try to entice you to stick around.  They may even offer to up the credit limit.  It’s a trap, so don’t fall for it.

Before there was plastic, people used to pay with cash.  Remember cash?  If people didn’t have enough money, they waited until they did.  We all could take a page from their book.  People are too comfortable carrying around a boatload of debt.

Get rid of your debt for good.  Keep one credit card for emergencies and let the rest go.  Pay with cash or not at all.  If it is meant for you to purchase a particular item, then it will still be there in three or four months when you've got the cash.

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