When to Use Credit Cards

by Lee Wyatt
(last updated August 23, 2013)

Have you ever noticed just how much of a double edged sword credit cards are? When used properly, credit cards can give you a huge advantage in life, and help you get ahead and do the things that you need done. However, if they are used incorrectly, then credit cards can severely damage your credit, and make life impossibly difficult for years. The trick of it all is to learn when to use credit cards, and when not to use them. Here are a few simple guidelines that you can use to help ensure that you are going to use your credit cards wisely.

  • Use only when necessary. One of the more common causes of credit card problems is people using a credit card for anything and everything that they can think of. If you end up using a credit card for every day purchases (such as clothing, food, or even gas) can easily end up costing you more money than you would believe. Between having to repay what you spent (because you will have to repay it) you will also have to pay a little extra due to interest. Instead of using a credit card use cash, a debit card, or even a check if you can.
  • Don't max it out. A good rule of thumb to keep in mind is that you should keep your credit card usage within a total of 1/3 of the max. This will allow you to have something in store incase of an emergency, and allow you to pay off the balance a whole lot quicker. In addition, this will also help prevent you from making an unnecessary purchase, and keep you from spending more than you can pay back too easily.
  • Pay off as much as possible. Never, ever, ever settle for paying only the minimum balance. Doing this will only help out the credit card company, and drag out the time and money spent on repaying what should be a relatively low amount. The thing about paying the minimum amount is that most of the payment goes towards interest only, leaving a vast majority of the principle untouched. The longer that you go with the minimum amount, the more time interest has to build up, effectively making the minimum payment relatively worthless.
  • Only buy things you need. Ideally you should only use a credit card to purchase things that you need, and not the things that you want. Learning the difference between wants and needs can be a difficult lesson for some people, but it is one that needs to be learned. Do not use a credit card as an artificial means of supporting a lifestyle that you cannot afford. If you do, in the end it will come back to haunt you.
  • If you run into trouble, let the card know. Everyone has financial problems now and again, and it is really nothing to be ashamed of. However, if you do run into a problem you need to be as proactive as possible. This means that you need to contact the credit card company as early as possible and let them know the change in your financial status. Oftentimes you can renegotiate your terms if you are proactive, and don't default on what you owe.

Author Bio

Lee Wyatt

Contributor of numerous Tips.Net articles, Lee Wyatt is quickly becoming a regular "Jack of all trades." He is currently an independent contractor specializing in writing and editing. Contact him today for all of your writing and editing needs! Click here to contact. ...

MORE FROM LEE

The Viking Bellflower

The Viking bellflower, also known as the Campanula Viking, is a relatively new hybrid perennial that you can now add to your ...

Discover More

Proper Pruning Tools

Pruning is an important part of taking care of your trees, flowers, shrubs, and general landscape. However, it is next to ...

Discover More

Anodized Cookware

Whether you know it or not, chances are pretty good that if you have ever gone shopping for cookware that you have seen ...

Discover More
More Money Tips

Living without Credit Cards

If you are really interested in being as financially independent as possible, then you need to be as free of debt as ...

Discover More

Reducing Credit Card Debt

Credit card debt is the kind of debt that can grow exponentially and can severely damage not only your credit score but your ...

Discover More

Comparing Credit Cards

Shopping for a credit card is easily an overwhelming task and one that you may want to breeze over. Don't let your excitement ...

Discover More
Comments

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is 2 + 1?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)


Videos

Subscribe to the Tips.Net channel:

Visit the Tips.Net channel on YouTube