Bless those credit cards. They come to our aid in our time of need. A pox on those credit cards. All they do is try to fleece us. Does this sound like ambivalence? It is, and the truth is, credit cards are just little pieces of plastic. They are neither good nor bad. The person using the card is the catalyst for good or evil when it comes to whether their credit is gold or lead. Unheeded usage of credit cards is about the fastest way anyone can trash their credit.

On the other hand, that same financial adviser will also tell you that if you use them with care, credit cards are a great way to build your credit and protect your financial future. The question then becomes not whether or not you should have a credit card, but what steps you should take to keep that credit card from ruining the credit you\’re trying so hard to use it to build. With that in mind, here are 5 tips from top financial advisors on the proper care and handling of your credit card.

1) Don\’t say yes to the first credit card that comes your way. The number one mistake people make when choosing a credit card is selecting the first one to land in their mailbox. Low interest, low/no fee cards are not marketed as vigorously as those with a higher APR. You\’re going to be the one paying the difference.

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) Opt-out of interest rate increases. Everyone complains when their credit card company decides to increase the interest rate on their card. What they don\’t realize is that they have a choice. In this case, when your credit card company\’s trying to raise your interest rate past what you\’re comfortable with, you can “opt-out”. You won\’t be able to charge anything more to that card, but you\’ll still have up to 5 years to pay off your current balance. (Check this policy with your credit card company before signing on the dotted line.)

4) Use your debit card instead. A debit card can be used in the same way as a credit card but draws funds for the amount of purchase immediately from your checking account. This makes them as flexible and convenient as a credit card, without running up a debt you can\’t pay. Cash is practically obsolete, but the debit card is a fine substitute for cash and will keep you from running up an exciting credit card bill.

And finally…

5) Tell your creditor if you can\’t make the monthly payment. Creditors, contrary to popular belief, are not ogres. If you find yourself in a long run of hard luck which devastates your income, pick up the phone and talk to someone at your credit card company. They don\’t want to be stuck with law suits or unpaid bills any more than you do. They will work out a payment plan with you that you can follow without busting your credit rating. You may have to go up the supervisory ladder at the company to finally find the one with authority that understands and can help you with this. It\’s up to you to follow the plan laid out to you religiously. They did their part; you do yours.

Being a responsible credit card owner can make a difference between helping your credit and destroying it. Be kind to your credit and your credit card.

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Category: Finances
Keywords: credit cards, credit, personal finance, finance, money, bank cards, money on the go, moneyonthego