How do you use credit wisely?

The first thing to remember is to be honest with yourself about how you're using it. If you're going overboard and using your credit cards to hide the truth from yourself it's all too easy to end up in a financial hole that's near impossible to get out of.

Most important in being honest about where you are financially and especially with credit is to look at the numbers. Are you really where you think you are?

Too often the answer is no, you aren't. There's something you forgot when you decided that things were going well. But if things are going nicely, it's a great feeling to know that you were right about your situation.

The second thing to remember is to not go overboard. Even if you have the credit, do you really need to buy everything you think you want? Saving and investing is often a much better plan for the long term than spending freely.

The third thing to remember is to not make excuses for what you spend. When money is tight it's easy to dismiss running up the credit cards because of holidays and birthdays. If you can't afford to spend the money, perhaps you should cut back. Other people will generally understand.

The fourth thing is to make sure you are getting the best possible rates on any credit cards or other debts you're carrying. There's no point in paying more for the money you owe than you need to.

Make sure your interest rates haven't been climbing for no good reason. Credit card companies do sometimes increase rates without what you would think of as a real reason. If your rates are going up for no reason, and the company won't lower them, remember that there are plenty of options out there. Remind the company of that too, and be prepared to follow up and find someone who will offer more reasonable terms.

Finally, know your own weaknesses. Do you fall for impulse purchases often? Do you just love spending money? Do you love to eat out?

If you know where your worst spending habits are, you can address them. Find ways to keep from spending excessively in those areas that really don't work well for you.

Set a budget for those things you don't want to give up on completely. It's often harder to give something up completely than it is to find a way to enjoy it in moderation. There should be some room for fun in most budgets.