Owning a credit card can be quite an advantage. Whether
making online purchases, booking an air ticket or a hotel
room on the phone or simply being in need of some
emergency cash, having a credit card can be a big help.
However, getting a credit card is also a huge
responsibility and if you don't keep an eye on your
spending habits, credit cards can create some serious
problems. Here is an excellent list of tips on proper
credit card use and if you follow these, you will likely
stay out of trouble and your credit card will be a
blessing instead of a curse:
1. When you make a purchase with the credit card, it
is akin to taking a loan from your bank. What you
have borrowed has to be returned - so do not borrow beyond
your capacity to pay it back.
2. Always maintain a record of your credit card
balances during a month so that you are aware of what you
have already spent. This will help you evaluate if you can
make any more purchases in that month as even small
purchases can add up to large balances.
3. Retain all receipts at least untill you can compare
them to the credit card monthly statement. If some
purchases do not match or if some charges are higher than
those on the receipt, immediately contact your credit card
4. Never give out your credit card to anyone! This includes
people in your family and any of your friends. It is not
that you cannot trust these individuals, but you cannot
track purchases you are not even making.
5. When you charge more than you can repay, a lot can
go wrong. This can limit your future potential of getting
any kind of credit, including car loans, home mortgages
and other forms of loans.
6. Pay your credit card bills on time or even before
they are due. Doing so will not only help improve your
credit scores, but also help avoid additional costs
associated with late payment charges and accrued interest.
7. Pay your credit card bills in full every month.
This is easy to do if, based on your income, you establish
a monthly budget for your credit card purchases and then
not exceed that.
8. Keep your credit cards for new purchasing. don't pay one
credit card bill with a different credit card. This will
inevitably lead to more charging and higher balances.
Connie Gutchrif is the President and Editor of
FN Credit - An excellent
resource for information on credit. To learn more, be sure
to visit: http://www.fncredit.com