Credit cards are used wisely when: you pay your bill off in full every month, you set your payment up as an automatic payment, you are an organized person, you have one primary credit card and one backup, you avoid store credit cards, and you read your benefits brochure carefully. Credit cards are used foolishly when the opposite of the above is done, as well as: you use your credit card in an ATM machine (cash advance) and/or you use cash advance checks.
Wise: Pay it off each and every month. Get organized and set it up on automatic payment online to avoid forgetting about it. Keep one primary card, one backup and stay away from store cards that just pile up over the years. Understand your benefits and use them when they apply. Use only a small part of your credit limit (keep it under 10%). Review your statement each month for mistakes. Finally, use that card only when you would have paid cash for the item.
Foolish: Pay less than the full amount when the bill comes in. Use it to get a cash advance out of an ATM. Stay disorganized and forget to pay the bill. Stay disorganized and pay the bill late. Stay disorganized and go over your credit limit. Never review your statement for mistakes or improper charges. Finally, whip it out whenever you feel like it. To hell with the future. Live for the day!
Credit cards are used wisely when: you pay your bill off in full every month, you set your payment up as an automatic payment, you are an organized person, you have one primary credit card and one backup, you avoid store credit cards, and you read your benefits brochure carefully. Credit cards are used foolishly when the opposite of the above is done, as well as: you use your credit card in an ATM machine (cash advance) and/or you use cash advance checks.
Well said, Katherine. Let’s recap.
Wise: Pay it off each and every month. Get organized and set it up on automatic payment online to avoid forgetting about it. Keep one primary card, one backup and stay away from store cards that just pile up over the years. Understand your benefits and use them when they apply. Use only a small part of your credit limit (keep it under 10%). Review your statement each month for mistakes. Finally, use that card only when you would have paid cash for the item.
Foolish: Pay less than the full amount when the bill comes in. Use it to get a cash advance out of an ATM. Stay disorganized and forget to pay the bill. Stay disorganized and pay the bill late. Stay disorganized and go over your credit limit. Never review your statement for mistakes or improper charges. Finally, whip it out whenever you feel like it. To hell with the future. Live for the day!