Credit cards are a necessity in our modern times. Have you ever tried to rent a car without one? I have and had to put a $250 deposit down, what a hassle – what if you don’t have the $250 to spare?
If you use a credit card properly they are a blessing, used incorrectly they are a curse. If you use common sense you will be OK but many young people lack that. This is not just a problem of the young; a lot of us “mature” people seem to be short on common sense also.
Credit cards are not all the same. This article will hopefully clear that up so you can get a handle on your credit.
· Use your smarts and be cautious. If your credit is poor or even semi-poor and the only cards offered to you are with high interest rate use extreme caution. Pay your bills on time. And if possible pay the entire bill off each month or at least more than the minimum.
· Understand how interest is configured on your card. A lot of people don’t care about this but they should. Banks don’t give credit cards out for your convenience, that’s the way they make money. So if your balance gets high enough where the your interest is $80 per month on the balance owed and the bank sets a minimum payment of $20 and that’s all you pay the next month you pay interest on the $80 interest from last months bill – see where this is going? It is a never-ending cycle and the banks love it!
· Carrying a large balance each month you should consider a balance transfer to a lower interest card or better a 0% for a set period of time. Then during that time double or triple your payments to pay the balance down or off completely.
· If you have a large balance and can’t pay it completely off – be pro-active. One option is a consolidation loan. If you have a poor credit score you may not get the best interest rate bit I’ll bet it is better than your credit card. Then don’t use the credit card and run up that same debt again.
· If you have a large credit card balance but have money in the bank use that to pay your card off. A friend of mine confided to me that he was $20,000 in credit card debt. He was seeking my advice of what to do. After a few questions about his finances he admitted that he had about $40,000 in a bank CD. I asked him the rate the bank paid him and the rate was ridiculously low. I’ll let you figure what my advice was.
· There are many types of cards available – not just credit cards.
1. If you have a hard time managing credit then use a debit card. That is tied into your bank account and if you don’t have the cash available you can’t make the purchase. If you are undisciplined in credit this is for you.
2. Secured credit cards secured by a deposit but will have a credit limit. With some banks a $250 deposit will only give you a credit limit of $125 to $150. Others the limit is the full deposit. Check the fine print.
3. Credit cards that give you a certain percentage back.
4. Credit cards that give you other perks like frequent flyer miles. A friend of mine uses this type and charges everything BUT pays it totally off each month. He flies across the country twice a year to visit his sons but pays very little or nothing for his trips.
I spoke to my son last week and we discussed credit cards. He is self- employed and wants to buy his first home. A few years back they had a lot of credit problems. However they have gotten smart and have a good handle on their finances. He told me that all that fine print on the back of the credit card information sheets – they read it and have refused to accept credit cards from companies who use deceptive practices (and some of them do – just barely legal).
Whatever type of card you choose, be sensible how you use it. As long as you do this there is nothing to worry about. It’s your choice, be in debt and be a slave to a credit card or use them sensibly and be free.
If you need a good credit card please visit our site. See the link below.
Author Resource:-
http://www.1-800BadCredit.com provides up-to-date information for people
with bad credit. Providing auto loans, mortgages and refinance options,
credit cards, credit counseling, personal loans, identity theft
protection and advice & tips on saving, budgeting and getting out of
debt. Founded by Dewey & Leslie Kearney who understand bad credit
because theyve been there too! Visit our site:
http://www.1-800BadCredit.com
![[Valid RSS feed]](http://www.articlelayout.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
