How To Use Credit Cards Wisely

Credit Cards and the companies, some times we hate them and the policies that go with the unsecured credit card industry, however, a credit card can be quite useful and in fact critical if you’d like to do some things, such as rent a car.

We may not like the policies of some credit cards, but face it, we are being provided an unsecured line of credit and if you pay off a majority of credit cards with in 30 days, it is with minimal or no interest.

Now, in managing the use of cards, it is important to note a number of things that credit cards give us:

1)   Credit Advantages for Credit Score.

2)   Emergency ‘Money’

3)   A form of ‘identification’

4)   Benefits that credit card programs add for their users.

5)   Recourse against bad sellers or transactions.

With that, we need to understand, when we carry a balance, we are going to pay.  And as of this writing, we will pay and pay much.  Now, to manage this well, understand that a 2% or so interest rate, per-month is not that bad, just pay the dang thing off as soon as you can, preferably monthly.

Having covered the obvious, I want to point out that when you do pay interest, you’re paying wages for the above mentioned services and you can gain a bit more ‘favor’ of longevity with having had paid interest.  It is no small wonder that unused credit cards or those that pay off their balance in full prior to a finance charge usually don’t have the benefit of a large credit line or get to keep their card very long when it is not used.

So it simply boils down to planning your purchases wisely, understanding that it ok to pay for the loan, though it seems at much ridiculous rates that we have to have such loans these days and to ‘carry a balance’ just make sure your balances are low.  In fact I like to keep mine no more that 25% of the credit limit maximum, not at the levels you may have been told ‘that could affect your credit rating’

About the Author:
Joshua Penman is a freelance writer and Web Developer.  His most recent work is for where you’ll find credit repair articles, services and resources.
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