How to use a credit card

Knowing how to effectively use a credit card is something that can only be learned through experience. The lucky ones are those who have been taught by their parents or concerned friends how to use a credit card wisely. The rest of us are left up to our own devices and let’s face it, most of us are green when is comes to handling our own money for the first time. A friend of mine in college racked up thousands of dollars worth of bills in her freshman year. Her part time job was insufficient to cover her monthly bills and she tarnished her credit rating for the next ten years. Even years after she had finally repaid all her bills she still had to have her parent’s co-sign an apartment lease for her because the landlord would not accept her as a tenant otherwise. She is now much older and much wiser. However, the learning experience was a bitter one. Using a credit card to your advantage means using it for emergencies or purchasing only to a set amount – an amount that you know you can safely pay off in full at the end of the month. Carrying a balance on your credit card is never a good thing because all that does is make money for the credit card companies. Sometimes it is unavoidable and you will be forced to put a big amount on your card. In such instances strive to put as much money toward paying off the debt as soon as possible. Only making the minimum payment is the best way to extend the life of your debt. Minimum payments will cause you to pay double and sometimes triple the original debt amount before you finally pay off the balance. Such a practice benefits no one except the bottom line of the credit card companies. When it comes to making a credit card purchase, always remember that you will have to pay for it later.