Five Bits Of Advice To Stop You From Trashing Your Credit With Credit Cards

There is a lot ambivalence surrounding that little plastic thing with the magnetic strip we call a credit card

. We hate them because they get us in debt over our heads. We love them because we can use them to purchase stuff without having to use cold hard cash that we don't have. Any financial pro will tell you that if you don't watch your credit card expenditures, your credit will take a nose dive faster and deeper than with just about any other financial instrument.

Think about it. It's not the little piece of plastic that is driving you into bottomless debt, it's you. Any financial pro will also tell you that if you handle your credit card carefully, they are a fine means to building credit and a strong financial future. So, the question is not whether to have or have not a credit card, it is how to manage it so that it helps your credit rather than becoming its ruination. Here are five simple tips from top financial advisors on the care and management of your little plastic card.

1) Don't grab the first credit card offer that comes to you. Credit cards are not all cut from the same cloth, or plastic, if you will. You need to read the literature that comes with the card offer, small print and all. The good cards, the ones featuring low rates and no fees don't hype themselves nearly as much as those with the high APR. You are the one stuck if you don't read enough to check the fine points of each offer.

2) Limit the number of credit cards you get. It's a lot easier to keep track of what you're spending on one card than it is to track your spending on three. Or five. Or seven. Or however many you've got sitting in your wallet right now.

3) Don't settle for interest rate increases. There is countless moaning and groaning heard about interest rate increases on credit cards. Guess what? You don't have to pay it. If your credit card company has announced an interest rate increase that is way out of your comfort zone, cancel your card. Of course, you will have to pay off the balance in a specified period of time, usually five years, but you will do so at the lower rate of interest. Be sure to read your specific credit card issuers policy on this sort of thing before you sign up for their card.

4) Use your debit card for purchases instead. Debit cards are issued through the same companies that issue your credit cards, making them just as flexible and convenient for use, but they draw directly from your checking account rather than running up your debt. I know nobody carries cash anymore, but using a debit card for smaller purchases and non-emergencies will go a long way toward keeping you from running up an unnecessary credit card bill.

Last but not least...

5) Tell your creditor if you cannot make a monthly payment. Scary and fruitless as this may seem, creditors aren't big green meanies. They don't want law suits or unpaid debts any more than you do. So if you do find yourself in a seemingly endless financial bind, pick up the phone and talk to someone at your credit card company that has the authority to make financial arrangements with you. They will work with you if you explain to them rationally why you find yourself strapped and unable to pay as expected. Once your repayment plan is agreed upon by all parties, you must hold up your side of the bargain. The company stuck their neck out for you, don't fail them, and don't fail yourself by ruining your precious credit rating.

Responsible credit card ownership makes all the difference between a credit card that helps your credit and one that's going to kill it. Handle your credit cards with care.

by: Joe Villanvera

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