Control Your Credit Card Use

November 9th, 2007 | Posted in Debt

Credit is great! You can walk into a store and buy expensive clothes or gadgets, whip out your card, sign your name, and walk out without spending any money! What could be better then, thirty days later, the bill comes in the mail. As time goes on, the balance of that bill gets bigger and bigger – even though you are making the minimum monthly payments!Before you know it, you owe thousands of dollars, your minimum monthly payment has risen to an unmanageable amount, and the credit card company is calling you daily about paying your bill. Your credit just became a nightmare.

Credit card companies work to make sure that you stay in debt. It is as simple as that. As long as you are in debt to them, they are making money – and the more debt you have, the more money they make. They are not on your side. Sure, they made it easy to buy that new living room furniture. You have that fancy exercise equipment…and they helped you get it. But now, they want you to pay for it, with interest.

In spite of this, everyone needs one major credit card for a few good reasons. First, having a credit card and making your payments on time helps you establish credit. This way, when you go to buy your first home or automobile, you won’t have any problems getting financed.

The second reason you need a credit card is for emergencies. If your hot water heater bursts, not only will it need to be replaced immediately, you may also need to replace some carpeting. If you don’t have the cash to take care of this emergency, a credit card will come in handy.

Of course, the final reason you need a credit card is because everyone has one…no, not really…but we do live in a credit oriented world. You need a major credit card to rent cars, buy airline tickets, and reserve hotel rooms.

Using credit cards for these things is okay, but only ‘reserve’ with the card, and then pay cash. For instance, use the credit card to reserve the hotel room, but pay cash when you check out, instead of having the hotel charge your credit card.

Learn to keep your credit cards under control. Use them to fill up your car with gasoline once a month, and then pay off the balance right away when the bill comes. This will keep your card active, help you establish credit, and at the same time, keep you out of debt!

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