Keep your credit clean
Credit card debt is one of the easiest ways to upset your financial health. Impulse buying is much easier when you have credit cards, which is what retailers are counting on. Learning to manage your credit card debt can be the difference in a good credit score or having to consider bankruptcy as an option to eliminate credit card debt.
Ideally, you have a credit card for emergencies and nothing else. That is a very strict policy and difficult to stick to, but it will keep you from getting buried by credit card debt. If you do have more than one credit card, you should try to only purchase what you can payoff each month. It seems contrary to building credit to payoff your charges each month, but it does show credit worthiness, which is just as important.
Surely you have noticed that department and retail stores have their own credit cards. You can walk into a store and there is a table set up at the front of the store. Every credit card that you have is an invitation to carry credit card debt. You are offered a premium to apply for the credit card. The premium can be anything from a stuffed animal to ten percent off of your total purchases at the store that trip. You need to exercise caution here, too. Remember the interest rate is the amount that you pay to have the ability to charge your purchases; interest equals profit to the issuer of your credit card. Make sure that you know the true interest rate before you sign an application for a credit card.
Many credit cards are used to purchase goods or services. You may purchase an appliance or another large ticket item. However, the single most common abuse of a credit card and the single most damaging way you can damage your credit is to use your credit card for cash advances. A bank debit card allows you to use funds from bank accounts without having to make a trip to your bank for cash; a debit card also allows you the convenience of not having to write a check for purchases. The greatest advantage to using debit cards it that they only use funds on hand. There is no interest, thus, no additional debt is incurred. However, when you take a cash advance, there is interest charged. Interest charged equals profit for the banking institution that issued the credit card.
Making informed choices about credit card debt can help you keep your credit clean. If you have good credit, you have more buying power. The goal is to have credit when you need it and not simply to satisfy impulses. It is a fine line, but it can be walked and you will enjoy peace of mind when you do not have to worry about over-extended credit card debt.
Ideally, you have a credit card for emergencies and nothing else. That is a very strict policy and difficult to stick to, but it will keep you from getting buried by credit card debt. If you do have more than one credit card, you should try to only purchase what you can payoff each month. It seems contrary to building credit to payoff your charges each month, but it does show credit worthiness, which is just as important.
Surely you have noticed that department and retail stores have their own credit cards. You can walk into a store and there is a table set up at the front of the store. Every credit card that you have is an invitation to carry credit card debt. You are offered a premium to apply for the credit card. The premium can be anything from a stuffed animal to ten percent off of your total purchases at the store that trip. You need to exercise caution here, too. Remember the interest rate is the amount that you pay to have the ability to charge your purchases; interest equals profit to the issuer of your credit card. Make sure that you know the true interest rate before you sign an application for a credit card.
Many credit cards are used to purchase goods or services. You may purchase an appliance or another large ticket item. However, the single most common abuse of a credit card and the single most damaging way you can damage your credit is to use your credit card for cash advances. A bank debit card allows you to use funds from bank accounts without having to make a trip to your bank for cash; a debit card also allows you the convenience of not having to write a check for purchases. The greatest advantage to using debit cards it that they only use funds on hand. There is no interest, thus, no additional debt is incurred. However, when you take a cash advance, there is interest charged. Interest charged equals profit for the banking institution that issued the credit card.
Making informed choices about credit card debt can help you keep your credit clean. If you have good credit, you have more buying power. The goal is to have credit when you need it and not simply to satisfy impulses. It is a fine line, but it can be walked and you will enjoy peace of mind when you do not have to worry about over-extended credit card debt.
posted by Simple Credit Life at 11:43 PM
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