Managing Your Credit Cards Responsibly

Posted by Tawana Rashing

October 14, 2009

by Tawana Rashing

Credit cards are both one of the most ingenious, and at the same time nefarious, inventions of all time. You get these awesome offers in the mail about high credit limits and no interest rates and bonus offers galore ? you can actually buy stuff without paying up front for it! And then you see the fine print ? and realize that yes, it really is too good to be true.

Of course, the credit card companies are counting on the fact that many people don?t read the fine print. They see these great offers, and they immediately want to apply. They also count on the fact that even if people read the fine print, the rules and regulations are so complex, most customers will screw up and see their APRs skyrocket.

Of course, if you?re one of the more responsible credit card users, you?ve never missed a payment, or paid late, you keep a low balance on the credit card and you pay off your purchases each month, then you?re golden! Until you get that notice in the mail saying there?s a change in the APR across the board for all users. And suddenly all of your good behavior through the years still results in an 18.99% interest rate.

No matter how much you love your credit cards, remember, they are very sharp double-edged swords. Credit card companies are in the business of making money ? so anything they offer that sounds too good to be true probably is. Their goal is to maintain a sustainable profit ? and special offers are great for that.

If at all possible, just avoid credit cards all together. You?ll be a much happier, carefree individual. Of course, that?s not always a feasible lifestyle for everyone, especially since credit cards can help build your credit history in a positive way. If you are going to get a credit card, at least go about it the right way.

And as with any financial decision, step one is always research. Research your own credit history and score (which can affect the interest rates you?re offered) and sift through all the credit card offers you?ve received. Typically the thing to look for is a low APR, or zero APR to start and then a fair APR after 6-12 months.

Once you?ve found an offer or two you like, call the companies to ask questions and get details. No matter how intensely you read that fine print, you should still need information about the credit card. Even if it?s just to make sure you understand the conditions. Credit card reps get paid to help customers, so take advantage of that.

Finally, try not to get a higher credit limit than absolutely necessary. Knowing you have $5,000 in credit on your credit cards isn?t really a temptation you want to deal with. If you are approved for the credit card and they give you a high limit, you should ask them to lower it to what you?d reasonably need. This will keep finance charges in check and help you manage your money and credit cards better.

About the Author:

About the Author: Tawana Rashing is an authority on credit cards and responsible money management. She is a freelance writer and works part time as a credit counselor helping people to manage their credit reports and debt history. In her free time, Tawana enjoys working on her novel, spending time with her children and gardening.

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