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How to Use Credit Cards Wisely

By: Green Panda | Date posted: April 09, 2008 (6:26 am) | Write a Comment (6 Comments)

Remember real money (yours) is involved.

Credit card (and other) debts can grow like weeds. Try to tame the it before debt gets out of control. Fixing one habit at a time works, trust me.

I wish I could say I was responsible with credit cards when I first had them. I’ve many of these lessons, unfortunately, from personal experience. The good news was that I changed my behaviors and now I do not have credit card debt.

How to Use Credit Cards

  • Remember real money (yours) is involved. You have to pay this back and it will be with interest. Cash advances typically have a higher interest rate than standard purchases. I learned this the hard way. I feel so stupid knowing I spent YEARS paying off a card filled with stupid charges.
  • Review your monthly statements. Identity theft is becoming more common and a good habit is to look at your statements every month. Sometimes credit card companies make mistakes on charges. I log in to my credit card account every couple of days to see if anything suspicious happens. I need to work on checking my paper statements.
  • Pay your bills on time. A good credit history can help when looking for a home as a higher credit score leads to lower interest rates. I had a bad habit of losing paperwork, so I automated all my bills. It saves on late fees and stamps. Many banks have online bill pay as a feature.
  • If you can, pay the full amount owed. Credit card companies might call you a “deadbeat“, but at least you’re not tied to them each month. If you can’t, then pay as much as you can. Try a debt snow ball or even snowflaking. Find money in your budget to eliminate your debt.
  • NEVER, EVER lend your credit card to anyone! Even if it is a trusted family member or family. This account is tied to YOU and you will be held responsible.

I’m amazed at how long it took me to learn these lessons.

What do you personally do to keep credit card debt at bay? How many credit cards do you use?

If you enjoyed this article, please let me introduce you to some f Green Panda Treehouse’s best posts.

Photo Credit: The Consumerist

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6 Comments
  1. Comment by DR's Money Management — September 16, 2008 @ 12:34 pm

    This is great advice, particularly the part about remembering that we are spending real money. There is a reason casinos use chips, not cash (well, several reasons actually). Psychologically, it’s much easier to lose chips than cash. Credit cards can have the same effect on us if we let them.

    Check out DR’s Money Managements last blog post..Cash Back Credit Cards | Rebates that Put Money in Your Pocket

  2. Comment by Green Panda — September 16, 2008 @ 12:53 pm

    That’s so true. I’ve heard college students refer to it as free money! It’s not free, it can be expensive. They’re a tool that has to be used cautiously.

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