How to Use Credit Cards Properly: Making Friends with Everyone’s Enemy

Despite what others say, credit cards can be a great tool to have in your wallet. Here are ideas about how to use credit cards positively and avoid falling into the credit card debt traps that many others do.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• credit card(s)
• discipline
• organization
• notebook
• pen

1. 1. Pick a good credit card.
   
   What's a good credit card? Preferably ones without fees. There's so much competition from credit cards, theres no reason to pay for fees.
   
   The only time you should consider paying a fee would be if you make a lot of purchases and would benefit from additional points. Another reasons would be insurance or warranties purchased on the card.
2. 2. Find Out the Balance Due Dates
   
   Is your balance charged on the next statement? or is it 2 months after? Find out. Don't assume that because your statement hasn't arrived it means you haven't been charged. Sometimes statements get lost in the mail or they have the incorrect address on file.
3. 3. Set a Date to Pay Off All Credit Cards
   
   Lets say you have 3 credit cards. Your MasterCard bill is due on the 21st of each month, your Visa bill is due on the 18th of each month, and your American Express bill is due on the 24th of each month. If you have the funds, pay them all off before the 18th. You make fewer trips to the bank, and you're less likely to forget about making the payments. Or even better, have it automatically withdrawn from your account. Just make sure you keep sufficient funds or else you'll be hit with late payment fees from your credit card as well as overdraft fees from you bank.
4. 4. Keep Track of Purchases
   
   Electronically or the old fashioned paper way, keep track of your purchases and budget for your purchases. You should always make purchases with the intention of paying it all off.
5. 5. Pay Off The Entire Balance
   
   Ideally, you want to pay off each balance each month. There's nothing worse than having your money wasted on interest fees. If you have to pay interest, carry the balance on the credit card with the lowest interest rate.
6. 6. Avoid Cash Advance
   
   Avoid using your credit card to get cash unless it's a cheaper option than using your bank card. Most credit cards charge higher fees and interest rates for cash advances.
   
   
   If there are some things you need to use cash for (for example a night out on the town), try to plan ahead and use your credit card for other purchases(such as groceries) that can wait to be paid next month.
7. 7.Use Your Points
   
   People collect points but rarely cash them in. As soon as you've collected enough for something you want, get it. Points/rewards programs rarely get better over time.
8. 8. Discounts
   
   Check what cards offer discounts you will use. Most credit cards offer something.

Tips & Warnings

• Pay off your balance each month.
• if you carry a balance, carry the balance on the credit card with the lowest interest rate.
• Use your points/rewards as soon as you can.
• Pick a date each month to pay off all your credit card balances.
• keep photocopies of your credit cards at home, and have the company number handy in case you need to cancel or suspend your card.
• if you lack self discipline, and can't follow these steps, don't get a credit card.