Dealing with Credit Cards

by Mama Chocolate on January 10, 2012

Guest post by Becky W.

I have a love/hate relationship with credit cards. You need them to build up your credit so that you can get great rates on home and car loans, but without proper discipline, they are an easy way to get yourself up to your eyeballs in debt. Millions of Americans suffer from excess credit card debt each year, and many of them struggle to make their monthly payments.

In our household, we have managed to wrangle our credit card usage. After using a couple of credit cards frivolously during college, my husband and I have resigned to only use credit cards that offer cash back rewards, and to only use them sparingly. If you too are wanting to keep your credit card spending under control, but still let it boost your credit score, do the following when using your cards:

Pay Your Balance Each Month

The quickest way to rack up a substantial amount of credit card debt is by charging way more than you can afford to pay off. To keep from paying high interest and annual fees, always pay off your credit card balance at the end of each month. If that means that you can only afford to charge a tank of gas or a family meal once a month, that is fine. Charging and then paying off that balance will keep your credit score up, keep a positive credit line, and keep you from overspending.

Look for Reward Programs

In our household, we only sign up for credit cards that offer reward programs so that we are able to benefit from our purchases. Most credit cards will offer points for each purchase you make which you can then later redeem for cash back or other rewards. We also keep a no foreign transaction fee credit card for when we choose to travel. While these cards don’t often offer the direct rewards that other cards do, they do prevent us from having to pay fees while abroad which can save us quite a bit.

Read the Fine Print

Many cards offer no annual fees and zero percent or reduced interest for new card signers. While this may seem like a great deal, these low interest charges and zero annual fees usually don’t last. Before signing up for a card, read the fine print to make sure that the interest rate you are signing up for will last and that no additional fees will be tacked on to the card 6 months after opening the card account.

Credit cards are tricky, but that doesn’t mean that you shouldn’t use them. They are a great way to build credit and maintain a solid credit history, but you need to exhibit discipline when using them.


{ 7 comments… read them below or add one }

Amanda Larson January 10, 2012 at 10:28 pm

My dad and I have an office Frontier Airlines card. We just “downgraded” it to a no annual fee card, but we have earned enough miles for at least 4 round trip tickets!! I can’t wait to take a trip somewhere fun :)
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{Not Quite} Susie Homemaker January 10, 2012 at 10:31 pm

Great tips! While credit cards CAN become bad things, when used responsibly like this you can save money using them!
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Mimi January 10, 2012 at 11:27 pm

I’m so glad we don’t have credit cards anymore. It’s way more responsible of me not to have them. Hard to get used to not having them in our lives!
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Ashley T January 11, 2012 at 4:29 am

Thanks for reminding me about this. We only have 1 credit card (after closing like all of them) but its much easier just to have that 1 instead of overspending. And I agree, they help your credit but can get you in a lot of trouble.
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Kay M January 11, 2012 at 5:45 am

I have no credit cards, and no plans in the near future to apply. They would just get me into too much trouble!
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Whitney @ Momma Knows Best January 11, 2012 at 6:27 am

We just paid of three of our credit cards – one more to go! It feels great not to have a lingering balance each month!!
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Stacie January 11, 2012 at 7:29 am

Great tips! We did use our cards responsibly, and are paying for it big time (literally) Luckily we’re getting ready to pay off ALL of our cards with our tax return this year, it’s going to feel so great!
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