Tips For Managing Your Credit Cards

Are you one of the thousands pulling your hair out trying to figure out how you're going to pay your credit card bill? Using your credit cards wisely and sensibly will help you avoid financial problems and establish a strong credit rating, so here's some information to help you get your credit card problems under control.

Credit cards have become an indispensable part of modern life. Consumers rely on credit cards to help achieve lifestyle goals by letting them take advantage of special bargains, spread payments out over several months, and provide cash in emergencies. Credit cards have become so widespread that they are often accepted as a piece of primary identification.

Millions of people use credit cards to avoid carrying large amounts of cash, for emergencies, to track spending, etc. However, charging more than your income allows can be worrisome and potentially devastating to your finances and your credit rating. The pitfalls of credit card use are the accumulation of large amounts of debt and the inability to make more than the minimum monthly payment.

It's important to look out for your own interests. Some credit card companies have lowered minimum monthly payments to less than 2% of the balance. It could take 30 years or more to pay off your credit cards if you pay only the minimum payment. Debit cards should not be confused with credit cards. There is no credit extended with a debit card. The money is deducted directly from your savings or checking account. The bottom line is don't spend more than you can afford to pay on a monthly basis.

Limit yourself to one or two credit cards. Keep one for business expenses, if necessary, and one for personal use. There will be an inquiry into your credit report for each application you submit. Your credit report contains a record of every company or institution that has evaluated your credit. It reflects negatively on your credit score if you have an inquiry that does not lead to the issuance of a credit card. Obtaining too many credit cards can affect your ability to finance other purchases as well, such as homes or automobiles. Too much available credit can cause suspicion in the eyes of a lender as to your ability to repay your potential debt.

For those of us who know how to use credit cards properly, credit cards can actually be quite fun and lucrative. If you used wisely, credit cards can be useful financial tools. When not used wisely, they can become a financial nightmare. Here are a few tips to help you stay on top of your credit cards:

o Minimize department store credit cards. Their interest rates can be extraordinarily high in comparison to other major credit cards.

o Don't charge large-ticket items. Look for other ways to finance your purchases. Many vendors offer layaway or installment payment programs. Search for a low-interest loan.

o Pay your bill in full each month. Take advantage of time without having to pay for it. If you can't pay down your balances, try to make more than the minimum required payment. The quicker you can pay off your purchases, the less you'll have to fork over in credit card interest.

o Look around for cards with low-interest rates. Annual service fees are also negotiable. It is possible to get a good deal on credit cards; you just need to do a little research.

o Use a bank debit card. If you love the sound of "charge it," but don't want the hassle of a monthly credit card bill, try a bank debit card. It works just like a credit card, but the charge is debited directly from your checking account : a good way to help control your spending.

o Avoid those credit cards, which are offering a high credit limit. There is great potential to overspend. Instead, pay down your balance before using your card to make additional purchases. Send in your payment well ahead of the due date. Issuers may charge late fees, and late payments could result in a considerably higher interest rate than the advertised rate.

So, the bottom line is by using your credit cards prudently you can reduce adverse effects of credit cards and maximize the benefits by spending wisely, using self-discipline, and paying off your balance as quickly as possible to avoid unnecessary fees!!!