Credit Cards

Credit Cards

Credit cards are convenient forms of payment, and can also allow people to spend beyond their means if they don't pay off the balance monthly.

About Credit Cards

Good things about credit cards:

1) They allow you to avoid carrying cash around.
2) They are convenient.
3) They can help you keep track of your expenses so you can deduct them at tax prep time.
4) They can help you buy something on credit and pay it off over time.
5) They can help you establish a credit card rating, if you pay them off in time.
6) Some credit cards offer rewards in the form of cash back or points that can help you purchase things you need or want.
7) Most credit cards offer a 'grace period' -- the time period between when you make a purchase and when you pay your credit card bill. During the grace period no interest is charged.

Bad things about credit cards:

1) They can tempt you into spending more than you can afford.
2) The credit they offer comes at a cost; if your debt isn't paid off before the grace period ends, those costs can mount up at a rapid rate.

How to avoid getting in too much credit card debt:

1) Create a budget for all your expenses.
2) Track your credit card spending. These days it's easy to check your credit card balance. You can even do it right from your mobile phone. So there's no excuse for spending over your budgeted monthly allocation. Give yourself a monthly budget and stick to it!!
3) Use only one credit card, and avoid saying 'yes' to other credit card offers that you get in the mail
4) Pay your balance in full every month before the end of the grace period.
5) Shop around and get the lowest interest rate you can find. Choose a credit card that doesn't charge an annual fee.

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