Don't Fall into These Consumer Credit Card Traps

Getting the credit you need can be easier than maintaining it. In fact, there's probably not a week that goes by without receiving a credit card offer in the mail. You'll see even more credit card offers online.

Stores - both in the mall and on the 'net - are quick to give you an immediate discount on your purchase if you sign up for their credit card. While that extra 10% off is tempting, before you realize it you have another credit card payment to make each month.

The problem with credit cards is that it doesn't seem like real money. Since you don't count out those dollars leaving your wallet, it's easy to underestimate the impact of a swipe here and a swipe there.

Credit cards were never meant to be a substitute for budgeting. No matter how easy it was to spend the money, each month there's a day of reckoning on the payment due date. Making the minimum payment will keep you from getting late fees, but look at your balance.

If you didn't charge another nickel, how long would it take to pay off the balance? That's a question you need to ask yourself. Don't make the mistake of getting a second, third or fourth credit card just to transfer the balances.

Balance transfer is a great way to move higher interest debt to a lower interest card. It's not meant to shuffle money like a shell game. Most Americans have more credit cards than they need.

Since the major cards are accepted practically everywhere, you only need one or two credit cards. It's easier to keep track of the balances on one or two cards than on six or eight credit cards, which many people carry.

Cash advances are like getting a loan on demand. The problem is, it's the most expensive loan you'll get. The easy access to cash from ATMs makes it simple to get ten bucks for lunch, fifty bucks for shopping and twenty-five bucks for movie ticket for you and your spouse.

That's $85 in one day. Repeat this once a week and your debt will skyrocket in a few months. The price for your easy access cash can be at the credit card rates of 24% and up. The rewards and bonuses sound tempting, but you may find that getting a credit card with a better APR (annual percentage rate) and no annual fee is worth more in the long run than the freebies that you might not use even if you earned them.

Using credit cards is the way to establish a good credit history. The problem is that misuse of credit cards destroys your credit rating. When you need to buy a car or want to purchase a home, that credit rating suddenly becomes very important.

Every careless shopping spree, every cash advance, every late payment - is factored into that credit rating. If you're going to use credit cards, treat it like cash and only charge what you can afford to pay. Otherwise, you cheat yourself out of the credit rating you need in the future for really important purchases.