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The Responsible Use Of Credit Cards

A credit card can be a useful tool to those who appreciate and understand how best to manage and use it responsibly. However, those who do not use a credit card wisely may find themselves deeply in debt very quickly. Everyone with a credit card needs to know how to use it in an educated and responsible manner.

The first step in responsible credit card use, is to be satisfied with the credit card or cards you already have and refrain from accepting every offer that is made to you. Anyone with good credit will receive numerous offers through the mail, encouraging you to take out a new credit card. The fact that a lender is offering you an opportunity to get another credit card does not mean that you actually need one. If you have too many credit cards, you may find yourself running up balances on multiple cards, which can be very dangerous to your financial well being and which of course, will be harder to fix. Most people should not have more than two credit cards, one for day-to-day purchases and the other that may be used strictly for emergencies. Individuals who own companies or who make up-front payments for job-related travel sometimes may need a third card so they can easily keep track of which purchases are business and which are personal.

The second step in using a credit card wisely is to shop within your means and refrain from buying things you cannot afford. If you are spending more than you earn with the help of your credit cards, you are on your way to financial problems. It is okay to use credit for convenience, but you must be sure that you will be able to pay your full balance each month, or within a fair amount of time. If you are buying extravagant items that you cannot pay off within a few months, you are not using your card responsibly.

You should also aim to pay more than the minimum payment on your credit accounts. If not, you will find that the accruing interest adds up very quickly and will eventually put you in serious financial trouble. Individuals who pay only the minimum payment each month will find themselves further in debt than they expected.

Thirdly, if you have a credit card, you should always check your credit report diligently. Part of being a responsible credit card user is checking your credit report at least once each year, especially due to the increasing risk of identity theft. If someone is using your identity to open credit accounts, you will find pick this up when you look at your credit report. In many cases, people realize that it is incorrect information that is pulling down their credit scores. Such problems can be appealed and rectified, but only if you are aware of them. Also, checking often will help you to gauge the effect that your bill payment habits have on your credit history and will help you to make better decisions. The final tip for using your credit card wisely, is to know when you need professional help. If you find that your spending is out of control, denying the problem or ignoring it, will not make it go away. Seek assistance from a trustworthy credit counsellor who can help you come up with workable solutions to your credit problems. If you are having credit troubles, the sooner you seek help, the faster you can be on the road to rebuilding your credit.

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