Credit cards are not free money. They can become a black hole for your finances in the blink of an eye. Use them responsibly. Remember: at some point, you'll have to pay them back.
You only need one: You can get into enough trouble with one credit card; don't compound the risk by getting more.
Cut up the rest: Once you've chosen your card to keep, destroy the others. Be sure to also cancel the associated account.
In case of emergency: Consider your credit card a safety net. Don't use it for anything that you don't absolutely need.
Pay off the balance: As soon as you get your statement, pay off the balance. Minimum payments don't cover much more than the interest charge.
Look for hidden fees: Look closely at your statement and take note of what kind of fees you are paying out. Programs like credit life insurance, credit disability insurance, involuntary unemployment credit insurance and credit property insurance are generally unnecessary. Make sure you don't have to pay for them.
Get a low interest rate: Zero percent interest doesn't last forever. Many credit cards offer this as an introductory rate, but before you jump at this opportunity, find out how long it lasts and what your rate will be when it expires.
Watch your statement: On top of hidden fees, you may also find double or fraudulent charges that you will need to dispute.
Utilize rewards: Rewards programs are everywhere these days. If you have the discipline to pay off your balance each month, use your card to pay all of your bills and rack up lots of points. Just be sure to use the card responsibly. The rewards won't even cover the interest that you'll pay if you carry a balance.
Say no to the free shirt: Just about everywhere you go, there's somebody trying to get you to sign up for their credit card. A free shirt, free hat, or a ten percent discount may be appealing, but these little freebies can hurt you in the long run. Even if you never use the card, the application alone can bring down your credit rating.
Pay on time: Late payments are messy. They incur fees and allow the credit card company to raise your interest rates. Make a note on your calendar and pay ahead of time.
Staying out of debt is a big part of building a savings.
By Rich McIver (probebly not his real name)
