Use Your Credit Cards Wisely

By: Gary Giardina

Credit cards can be very useful; they can be enjoyable; and they can end up costing you a lot of money. You do not need to be a financial expert in order to avoid unnecessary pitfalls associated with credit cards-- basic information and basic common sense can go a long way toward helping you to use your credit cards to their best advantage. Using credit cards does not have to be a negative experience.

One of the most basic facts about credit cards which many people tend to overlook is that you will not only repay the money you spend, you will also pay interest and any other fees which your credit card company has applied. Many people think of a credit card as "free money"-- and this perspective can lead to financial disaster. The concept "if you can't afford it, charge it" often leads to huge debts and all of its consequences.

In order to avoid unnecessary debt, using your credit card within your means to repay what you owe is essential. If you are able to differentiate between something you need and something you want, you are already ahead of most credit-card users! You can then reasonably assess whether you will be able to pay your credit card balance on time and in full.

One drawback of credit cards is many people assume that if they have been offered one, this means they are financially qualified to use it. The fact is credit card companies are in the business of making money. If you have very little income, and especially if you are a student, it is wise to think twice before acquiring a credit card. This is also the case in instances of considering a credit card in order to pay off other debts. If you have been offered a secured credit card, not only does this mean you will be required to put something of high value at risk in order to obtain it, it means the company is requiring this because they are not certain of your ability to pay off your credit card bills. If a company is asking you to place something such as your home at risk for a secured credit card, this is a sign that obtaining the card is not a good idea.

After assessing your financial situation, you may have decided that you would like a credit card. If you use it wisely, it can be very beneficial to you. You will be able to make purchases when you do not have the cash on-hand for items you need, and you can use your card to make important payments on time. Although there are plenty of "scare stories" about the consequences of credit card debt, this does not need to happen to you. All you really need to do to ensure that you will not fall into the trap of credit card debt, and the longterm implications of such debt, is to put some careful thought and planning into your card's use in advance. You will find that your credit card can be very positive, if you use it wisely.

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