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[C1232]Credit Card Responsibility Act

by Rachel Yoshida, Rac

There are a lot of things that you can do to keep your credit score and your finances afloat when you have credit cards, but there are a large number of people who have next to no understanding of how they spend money affects their credit over the long run. There are a lot of questions that those just out of high school and getting their first credit card may have and we have some answers for them.

One of the first things that anyone getting their first credit card needs to understand is that it is not a toy. It may seem as though I'm talking down to them when I say this, but saying "I understand" is not as difficult as resisting the urge to use the card for things you do not need. You may be able to resist using the card for a large purchase of hundreds of dollars, but you might not be able to resist getting a latte at the coffee shop every day. It's only four dollars, right? That four dollars every other day certainly adds up to a lot more than you think it does at the end of the month. Do the math. What you spend in lattes would probably cover your water bill or cell phone bill every month if you have a habit of getting them.

Never, ever miss a credit card payment. It doesn't matter if you only have enough money to make the minimum payment, make it, anyway. It is best to make the maximum payment you can afford at the time and even better to pay it off every month, but not many people accomplish this. As long as you keep your balance down to under 30 to 40 percent of your credit limit, you should be fine.

Avoid the temptation to use the cash advance feature your card may come with. If you have a debit card, get the money out of your checking or savings account instead. The cash advance feature of your card, if it has one, is likely to have a higher interest rate on it and you do not want to deal with this. This should be reserved for emergencies only.

Last, but not least, avoid letting your card fall into the wrong hands at all costs. Even though many companies will cover the cost of a stolen credit card, a lot of headache is involved in making things right again. If you don't use your credit card for everyday purchases (and you shouldn't, unless you are a very financially responsible person), leave it at home in a safe place.

Owning a credit card can be quite an advantage. Whether making online purchases, booking an air ticket or a hotel room on the phone or simply being in need of some emergency cash, having a credit card can be a big help. However, getting a credit card is also a huge responsibility and if you don't keep an eye on your spending habits, credit cards can create some serious problems. Here is an excellent list of tips on proper credit card use and if you follow these, you will likely stay out of trouble and your credit card will be a blessing instead of a curse:

1. When you make a purchase with the credit card, it is akin to taking a loan from your bank. What you have borrowed has to be returned - so do not borrow beyond your capacity to pay it back.

2. Always be aware of your outstanding credit card balances. This will help you determine whether you can make additional purchases. Even small purchases can really add up to big balances and substantial interest charges.

3.Any credit card receipts should be kept until you can compare them to your monthly statement. If you find any purchases you did not make, or higher charges than those on the receipt, contact your credit card company immediately.

4. Never give out your credit card to anyone! This includes people in your family and any of your friends. It is not that you cannot trust these individuals, but you cannot track purchases you are not even making.

5. Never charge more than you can repay. When you do, you can hurt your future chances of getting any kind of credit, including car loans, home mortgages and other forms of loans.

6. Pay your credit card bills on time or even before they are due. Doing so will not only help improve your credit scores, but also help avoid additional costs associated with late payment charges and accrued interest.

7.Try to pay all your credit card bills in full each and every month. Have payments of a certain amount in your budget and try not to purchase more than that amount.

8. Use your credit cards for new purchases only. Too many people use one credit card to pay another credit card bill and that always leads to more spending and higher balances.

Article Source : Debt Consolidation Credit Cards

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Both Rachel Yoshida & Connie Gutchrif are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Rachel Yoshida has sinced written about articles on various topics from Home, Finances and Education. Rachel Yoshida is a writer in the field of finances and is currently assisting those in need of , particularly in the state of. Rachel Yoshida's top article generates over 550000 views. to your Favourites.

Connie Gutchrif has sinced written about articles on various topics from Credit Cards. . Connie Gutchrif's top article generates over 3600 views. to your Favourites.