Being Smart About Credit Card Use

So you've received a sparkling credit card with a sky-high limit. Not so fast! Before embarking on a huge shopping spree there are a few important things you should know in order to avoid a credit crisis in the future.

Perhaps your new card is designated for "emergency use only." If so, you must define what specifically qualifies as an "emergency." For some people, it could be a ruptured pipe flooding the basement. On the other hand, some people think the Annual Shoe Blowout at the Super Shoe Warehouse constitutes an emergency. Whatever your definition, decide what the card's purpose is and stick to it.

Perhaps you've obtained this new card in an effort to improve your credit rating. This is an excellent idea if you're young and hoping to make a major purchase in the future such as a home. If credit improvement is your goal, be sure to use your card in a manner that helps your credit instead of hurting it.

You can maintain a healthy credit score by paying the full balance each month. Be sure to do it on time. Doing so will show that you're a responsible borrower. You will also avoid having to pay high interest fees. Set a budget and stick with it. This will prevent you from accumulating debt rather which will hurt your credit rating. Charge only what you can comfortably pay off, without having to tap into your savings.

Some people feel the need to look at their credit record on a monthly, weekly, or even a daily routine. It's wise to carefully observe your report to detect any fraudulent activity. However, you should do it responsibly. It's best to check through one of the three major credit bureaus. You can actually hurt your score if you constantly check though a credit lender. You should only check through a credit lender if you're actively trying to get credit.

A common mistake is to rely on credit cards, rather than savings, to make ends meet on a routine basis. This will take you down the path to heavy, long-term debt. The purpose of maintaining a savings account is to have something secure for the future, or safety net if you're going through a rough patch.

Credit cards make shopping convenient no matter where you are. The internet has spawned a completely new global shopping market, making it easier than ever to find just about anything and have it sent directly to your home. Make sure the site you're purchasing from is secure before using your card. This will help you avoid fraud, scams, and identity theft, which can cause permanent, irreparable damage to your credit.

Now that you're familiar with the basics of smart credit card use, maintaining a healthy credit score and staying debt-free will be a cinch. You're ready to go out there and begin charging!