How to Make Credit Cards Work For You (Not Against You)

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For better or worse, credit cards are a big part of our society today. In fact, it’s how we’re often expected to pay for things. But don’t let them fool you. Credit cards can get you into big trouble if you don’t tread carefully. Here’s how to safely navigate the credit card battlefield:

Understand fees and interest

Once their intro offers come to an end, all credit cards charge interest on any amount not fully paid by the end of the billing cycle. Some cards even charge annual fees. So when choosing a card, don’t just pick the shiniest offer. Do a little comparison shopping to find out which card is right for you.

Always pay in full

Would you ever intentionally pay more for something than it cost?  That’s exactly what you’re doing if you charge things and don’t pay off your card that month. That gaming system bundle you just had to have for $400 will turn into a bundle of extra interest costs if you take too long to pay it off. Why shop around for the lowest price only to end up paying more when you add in the interest costs?

Don’t use it as your emergency fund!

We’ll say it again, “Do not use your credit card as your emergency fund!” They’re terrible for that. The situation causing the surprise need for cash is probably already stressful. Don’t make it worse by having to sink into debt to pay for it.

Don’t charge impulsively

If you can’t pay in full, according to the bullet above, at least have a plan for how you’re going to pay for your purchases. Especially the bigger ones. Calculate how long it will take you to pay it off and how much more it’s going to cost you by doing that. If it still seems like a smart idea, go for it. Just don’t go for it without stopping and thinking about it first.