Tips For Managing Your Credit Cards Wisely

Almost everybody these days has a credit card. Most in fact carry two or more in their wallets. Credit cards are certainly are an important financial tool. They make a convenient way to pay for purchases without cash and a source of emergency funds. One can also use them to build up their credit scores which is important for those wanting to make important large investments such as a first home. Unfortunately many people have found out the hard way that credit cards can be a double edged sword. While they indeed help many establish a good credit rating for others who have not managed their cards wisely they find themselves in financial trouble.

So how can you manage credit cards wisely to boost your credit rating and keep out of trouble and possible bankruptcy? The following tips will help anyone to use their cards to their advantage.

1. If you have the money pay off your entire card balance every month. First of all doing that will keep you from having to pay interest on your balance. Secondly since that is a sign of good financial management the card companies will likely increase the amount of your credit line. Finally it will help boost your all important credit score.

2. If you can't pay off the entire balance then pay more than the minimum payment. If you make just minimum payments every month it will take you decades to pay it off. Paying more than the minimum amount every month will also save you a lot of interest over the long run.

3. Use balance transfer cards. If you have good credit you can use balance transfer credit cards with zero or low interest and save a lot on your interest payments every month. The savings in interest you get by using balance transfers can be plowed back into paying off your debt. If you have poor credit and do not qualify for a balance transfer card you should still shop around for a card with a lower interest rate to use instead of your higher interest cards.

4. Anyone with poor self control with their spending should only use their credit card for emergency purchases such as car repairs. Compulsive shoppers will only get themselves in trouble by using cards. Those individuals should at least limit themselves to one card so they are kept in check somewhat by the limits that the issuing company puts on their cards.

In conclusion it is best to use credit cards as a tool to help increasing your credit score and for paying for unexpected expenses. Remembering all the tips above will help you benefit financially and avoid getting into trouble.

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