Staying Out of Trouble with Credit Cards

People love credit cards. After all, they are accepted at just about every retail outlet. Then can be used to purchase goods, services, and entertainment. With one simple sweep of the card, everything you wish to have is at your fingertips. In addition, credit cards provide a number of additional benefits that don’t come with making purchases with cash, such as purchase protection, extended warranty protection, travel insurance, and car rental insurance.  It’s no wonder millions of Americans use their credit cards every day. In addition, it is no wonder the average American carries $9,000 worth of credit card debt. With so many people struggling with credit card debt, and with so many identify thieves out there itching to get their fingers on your personal information, there are a few tips to follow to help prevent getting into trouble with credit cards.

Tip #1: Be Realistic

Many people lose a sense of reality when they use their credit cards. The ease with which they are used makes it similarly easy to forget that using them is like taking out a loan. This is real cash you are talking about, so spend it wisely. Don’t forget that the money you charge on your credit card needs to be repaid and it needs to be repaid on time. Never spend more than what you are capable of repaying. If you spend more than you can pay back, your credit rating can be seriously damaged. This will make it far more difficult for you to get car loans, home loans, or even other credit cards. Furthermore, if you only pay the minimum payment at the end of each billing cycle, you will incur finance charges. Even credit cards with introductory 0% APRs will cost you money when you carry your balance from one billing cycle to the next. Therefore, try your best to pay the balance in full at the end of each cycle. If this isn’t possible, pay as much as you can in order to keep the finance charges down.

Many people lose a sense of reality when they use their credit cards. The ease with which they are used makes it similarly easy to forget that using them is like taking out a loan. This is real cash you are talking about, so spend it wisely. Don’t forget that the money you charge on your credit card needs to be repaid and it needs to be repaid on time. Never spend more than what you are capable of repaying.Many people lose a sense of reality when they use their credit cards. The ease with which they are used makes it similarly easy to forget that using them is like taking out a loan. This is real cash you are talking about, so spend it wisely. Don’t forget that the money you charge on your credit card needs to be repaid and it needs to be repaid on time. Never spend more than what you are capable of repaying. If you spend more than you can pay back, your credit rating can be seriously damaged. This will make it far more difficult for you to get car loans, home loans, or even other credit cards. Furthermore, if you only pay the minimum payment at the end of each billing cycle, you will incur finance charges. Even credit cards with introductory will cost you money when you carry your balance from one billing cycle to the next. Therefore, try your best to pay the balance in full at the end of each cycle. If this isn’t possible, pay as much as you can in order to keep the finance charges down.

Tip #2: Monitor Your Spending

In addition to being aware of the reality of what you are spending with your credit card, you also need to monitor your spending. Always remain knowledgeable of your credit card balance. Remind yourself that the goal is to bring that balance down rather than to make it grow. Remember, even small purchases add up over time.

Tip #3: Keep Your Card to Yourself

Another mistake credit cardholders make is letting their friends and loved ones use their card. This seemingly innocent gesture of good faith can lead to a great deal of added debt – debt for which you are responsible for repaying. Never give your card to someone else, it is the same as putting your entire financial future in their hands. In addition, lending out your credit card only opens the door to identity theft, a problem that can take years to overcome.

Tip #4: Monitor Your Credit Card Statements

Every time you make a purchase with your credit card, you should keep your receipts. Then, compare them against your monthly credit card statement. If you notice any charges that you did not make, be sure to report them immediately to your credit card company. You are responsible for paying $50 of unauthorized charges on your card, but no more. The sooner unauthorized charges are noticed, the less likely you will be held responsible for them. Even better, your chances of catching the thief are dramatically improved.

Tip #5: Don’t Rob Peter to Pay Paul

Many cardholders make the mistake of using one credit card to pay off another. This only results in an incredible amount of credit card debt that increases substantially with each billing cycle.

Tip #6: Put the Plastic Away

Sometimes, simply putting your credit cards away is a great way to keep yourself from getting in trouble with your credit card. Keeping your credit card at home makes it far more difficult to give into impulse buying tendencies. In addition, by the time you get home and get your card, you might have given yourself the time you need to talk yourself out of making a purchase you don’t need. In addition, paying with cash helps remind you of just how much you are spending, so keeping only cash on you will help you remember just how much you are spending when you make a purchase.