Responsible Credit Card Use

By Leni Parrish on January 31, 2010

If I knew then what I know now about credit cards, I would have been more cautious and responsible with my plastics over time. Time and again, financial gurus have stressed the need for these cards to build a good credit history. A high credit score means institutions will likely consider you to be relatively safe to lend money to or provide jobs. However, I should have asked myself before I signed up for one account years ago if I am responsible enough to handle it. This is because I found myself in a deep financial mess that took years to fix. Now I am wiser and vowed never to be eaten alive by debt.

Come to think of it, there are actually benefits when using credit cards. There are cash backs, rebates and discounts available to account holders. However, the number one key is to pay off the balance every month to avoid unnecessary interests. This means having a credit card entails having the discipline to monitor dues and having the budget to pay the bill. Remember that every time you swipe that card, you are spending money that you might not have yet. This is one lesson I learned the very hard way.

I got these tips about credit cards that can help me protect my credit score and my name, as well:

·        Late fees are $30 or more. This amount is not a joke especially if it will also incur interests, on top of amount due’s interest, if left unpaid. So make sure that you schedule your payments on time and when they are due. Keep in mind also that missed payments will lower your score and can potentially affect your future loans.

·        Remember to read the fine print. Know your interest rates, due dates and grace period. These are facts that can help you manage your account better.

·        It is recommended that consumers like us only have two to six credit cards. More than this number will probably lower your score. Alternately, having to close accounts at one time will raise eyebrows in the financial industry.

·        If your score is 700 or higher, you may negotiate with your card company for a lower interest rate or they may forego late fees.

·        Never exceed more than 30% of the credit limit of each card. Excessive use also merits a lower score.

If I followed these tips from the very beginning, I would have been saved from sleepless nights and financial struggles. If you plan to get yourself a card, then maybe you can start doing it right.

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