Documentation on irresponsible consumer behavior has demonstrated repeatedly that individuals become careless with credit and aren't aware of the serious consequences - until they approach a bank to borrow money.

"Sky's the limit" is what some high income earners tend to think. When they engage in irresponsible spending, they tend to forget that they have a credit history to protect. Because they earn high salaries, they think there is no tomorrow and go beyond their credit limits or max out their credit cards.

It is often said that it's the poor person who has better spending habits.

What can the smart people with excellent credit health teach us? What steps can they recommend so we use credit intelligently?

Possession of multiple credit cards - is it really necessary to have more than three credit cards? Do you find it difficult to say no each time a department store representative approaches you and says "it only takes ten minutes to fill out this application form?" The store will even throw in a bonus gift if you apply. It's a little trick that's called "securing wallet share" so that with the card fitting snugly in your wallet, you're more likely to purchase on credit;

Failure to make deadline payments - people are mistaken when they think that one or two missed payments won't be noticed. First, they're wrong; second, missing payments is habit forming! When people are short of cash, they'd much rather wait until the next payday to make a late payment on a credit card. This non-payment is reported by your credit card provider to the credit bureau. It is always better to meet the minimum payment, or if in a crunch, to make a short payment than not making any payment at all.

Maximum use of credit limits - this is also known as "maxing out" your credit card limit or your revolving line of credit. Instead of engaging in frivolous spending, why not leave room in your credit limit for a real emergency? The true meaning of credit has changed over the years; these days, people use credit to satisfy a whim or caprice, and not to cover urgent needs.

The habit of increasing credit limits is unhealthy. This is because people spend indiscriminately and then realize too late that they're reached the maximum. Being maxed out is strongly discouraged by financial planners. Avoid asking your bank or department store to increase your credit limit, if you can help it.

Making a budget and forgetting about it. People start with good intentions by creating a budget. A weeks down the road, they forget their good intentions and have a relapse. Back into debt again and again. Why? No budget!

Be Credit-Savvy

One thing to bear in mind: avoid asking for credit too often. Debt will not make you rich. It can spell financial ruin long term.

Here are some tips for managing credit the smart way:

Step # 1: reduce the number of credit cards to three at most. When it's time to pay, pay them before deadline date.

Two, avoid requesting an increase in your credit limit if you can; don't live beyond your means

Third, take a close look at your credit report annually. Find out if errors have been entered in it.

Fourth, instead of skipping a deadline payment, why not try to make some sort of payment, even if it's under the minimum payment? This is a lot better than not making any payment.

Step 5: The popular saying is "don't leave home without it." Well, we'd rather you left home with cash, not with your credit card.

Six, and most important of all: practice self-restraint. Yes, our society has wonderful gadgets, all promising to make our life easier.