Credit Cards - A Blessing or a Curse?

Owning a credit card can be quite an advantage. Whethermaking online purchases, booking an air ticket or a hotelroom on the phone or simply being in need of someemergency cash, having a credit card can be a big help.However, getting a credit card is also a hugeresponsibility and if you don't keep an eye on yourspending habits, credit cards can create some seriousproblems. Here is an excellent list of tips on propercredit card use and if you follow these, you will likelystay out of trouble and your credit card will be ablessing instead of a curse:

1. When you make a purchase with the credit card, itis akin to taking a loan from your bank. What youhave borrowed has to be returned - so do not borrow beyondyour capacity to pay it back.

2. Always maintain a record of your credit cardbalances during a month so that you are aware of what youhave already spent. This will help you evaluate if you canmake any more purchases in that month as even smallpurchases can add up to large balances.

3. Retain all receipts at least untill you can comparethem to the credit card monthly statement. If somepurchases do not match or if some charges are higher thanthose on the receipt, immediately contact your credit cardcompany.

4. Never give out your credit card to anyone! This includespeople in your family and any of your friends. It is notthat you cannot trust these individuals, but you cannottrack purchases you are not even making.

5. When you charge more than you can repay, a lot cango wrong. This can limit your future potential of gettingany kind of credit, including car loans, home mortgagesand other forms of loans.

6. Pay your credit card bills on time or even beforethey are due. Doing so will not only help improve yourcredit scores, but also help avoid additional costsassociated with late payment charges and accrued interest.

7. Pay your credit card bills in full every month.This is easy to do if, based on your income, you establisha monthly budget for your credit card purchases and thennot exceed that.

8. Keep your credit cards for new purchasing. don't pay onecredit card bill with a different credit card. This willinevitably lead to more charging and higher balances.

Connie Gutchrif is the President and Editor of FN Credit - An excellentresource for information on credit. To learn more, be sureto visit: http://www.fncredit.com

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