Using Your Credit Cards Responsibly

With many people experiencing hard economic times due to job losses, pay freezes, and shorter hours at work, it has become more important than ever to be responsible with how credit cards are used. Even if you are financially stable, chances are you could make some changes in how you manage your credit cards and find yourself in a much better fiscal condition. Here are a few simple tips on how to keep your credit report clean and still use your cards from time to time.

Many people think that the more credit card accounts they have, the better prepared they are for emergencies. This can be very dangerous thinking. All you really need is one or two cards with decent credit limits. Forget getting a bunch of gasoline and retail store credit accounts; go with one or two credit cards that are accepted just about everywhere and you will be able to deal with anything from purchasing an emergency flight to taking care of unforeseen medical expenses.

Along with keeping the number of cards to a minimum, don't charge any more than you can afford to pay off at the end of each billing cycle. It's fine to use your cards to buy groceries and pay utilities as long as those balances don't roll over to future cycles and begin to generate interest. Only run a balance when you've had an emergency situation, such as having to replace a major appliance unexpectedly.

Look for the best deals you can get in terms of credit card interest rates. Be wary of introductory credit card offers in which the rate will automatically adjust upward after the first six months, or if your payment is not posted until the day after the due date. While you do want to pay off balances at the end of each month anyway, obtaining the lowest rate of interest possible will help to minimize what you ultimately pay for that new refrigerator that you bought on sale.

Never be late with a payment. Since most bank credit card providers allow online access to user accounts these days, make it a point to always submit the minimum payment the same day you receive the card statement. You can still make additional payments later in the month, but making that minimum payment immediately means your account remains in good standing and will not be the cause of a negative item on your credit report.

Don't accept credit line increases. They are nothing more than an enticement to spend more money that you may not have. Once you have reached a decent credit limit, ask your provider to not offer any further increases. If an increase shows up on your statement, contact your provider and ask them to reduce the limit back to the former level.

Credit cards are great financial devices that make managing resources much easier. However, they must be handled responsibly in order to avoid creating a load of debt that cannot possibly be repaid. By limiting the number of cards you have, settling the balances as soon as possible, and taking control of your card limits, you stand a much better chance of hanging on to your good credit rating.