How to Properly Use Your Credit Card

Credit Cards. Many of us have a love/hate relationship with them. Credit cards can be used as a great financial tool as well as boost your credit score! But they are also an easy way to ruin your credit and your financial well being! That’s why it’s so important to know how to use them properly! In the last 12 months, nearly 34 million Americans, have been late making a credit card payment and 18 million people have missed a payment entirely. (Source: National Foundation for Credit Counseling, 2009 Financial Literacy Survey, April 2009)

Here is some good advice if you have or are thinking about getting a credit card:

1. Credit cards are a great way to keep track of the money you spend. One great way is to use a credit card to pay all your expenses throughout the month and than pay it off at the end of the month. That way you can keep track of spending, pay no interest and raise your credit score.

2. Try and find credit cards that give you points back especially for something you love. For example, if you like to travel, find a credit card that will give you points toward plane tickets. That way you’re earning something besides just a great credit score by using it. But make sure you don’t buy things just to earn points. As great as the point system is, it’s not worth going into standing debt for.

3. If you cannot afford to pay off your credit card each month, you cannot afford to have a credit card. The purpose of a credit card is to give you the money you make when you need it rather than giving you more money than you make.

4. Lastly, you really do not need a credit card to survive in the world. Even though having a credit card is a great way to build credit, they are only for those with self control. If you have a hard time controlling what you spend, I would recommend steering clear from a credit card all together!

Here are some things you should never do with a credit card:

1. Never max out your credit card.

2. Never make late payments. Even if there is a little grace period before you get charged, it is a bad habit to start because once you start paying late; it’s hard to get back on track!

3. Never keep your balance high for a long period of time. If your balance remains high for a long period of time, it will start affecting your credit.

4. Never just pay the minimum payment. Minimum payments are only good for the credit card companies. It means more money for them in interest.

5. Do not frequently open and close credit cards.

6. Lastly and most importantly, do not pick your teeth with them in public! It’s just gross. Especially if you do it and then give it to a cashier to swipe.