Wednesday, September 22, 2010

22 September 2010: Credit Cards

Credit cards have their place, especially in building credit to buy a home, the only thing I believe that you should borrow money for (barring medical emergencies). The important things when you have a credit card are:
1) Pay the full amount each month, not the minimum payment.
2) Keep a checkbook register for each credit card. When you reach your maximum amount (what you know you can pay back, stop using it until you pay it off. I recommend using it for gas, etc. to build credit, but never pay the minimum payment. You can even pay it each week or two weeks by internet depending how you are paid. That way you can keep from over doing it.
3) Know and follow your limit.
4) If you lose your job, cut up your credit card and avoid the temptation. Credit card debt can really mess you up.It is too tempting to use that card if you have no job saying, "I'll pay it all off when I have my new job." I have experience here, as I am still waiting for that new job 12 months after being laid off.

Remember, unless it is a house or emergency medical, if you have to borrow, you probably do not need it. If you can keep driving that old car till it reaches 300,000 miles, that gives you time to save up for a new(er) car.

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