It is no surprise that credit cards can be a huge problem. If you let your debt run away with you, you can find yourself in serious financial trouble. On the other hand, if you use credit cards wisely, they can be valuable financial tools. Here are some tips for the wise use of credit cards:
- Do not max out your credit card. Instead, use your credit card only for regular purchases that you would make anyway. If you are close to your credit limit, interest charges could put you over, triggering fees.
- Pay off your credit card balance each month. This means that you should only buy things on credit that you already have the money to pay for. Paying off your card each month means that you will not have interest charges.
- Make your payments on time. Always pay on time. You can either pay online, scheduling your payment so that it not late, or send a check in the mail at least a week before it is due. This will help you avoid late fees and keep your credit score in good shape.
- Do not apply for a lot of low apr credit cards. One or two cards can help your credit score. But if you are always applying for new credit, severe damage can be done.
Just like other personal finance issues, whether or not credit cards are dangerous depends on how you use them. Wise credit card use can make them a good tool.
