The problem is, you can’t get by without a credit card in this day and age. Cash is obsolete. Swipe you debit card at the fast food place and the cost of your Whopper is automatically deducted from your account.
What? No money in the account? No problem, switch to that credit card. Swipe, enter your PIN and enjoy that burger and jumbo fries combo.
So, how do you avoid the credit card trap that so many people find themselves in? Here are our recommendations:
- Don’t carry more than two credit cards. A wallet full of plastic means $100s in annual fees.
- Never pay the minimum amount. Even if it’s only $10 more, pay down your credit card balance ASAP. Credit card money is expensive money – as much as 29% interest if you’re a credit risk in the eyes of the issuer.
- Shop around. Different credit card companies offer all kinds of incentives, from SkyMiles to a low, 12-month introductory rate of just 6%.
- Don’t take cash advances on your credit card. You get soaked on interest. Hold a garage sale instead to raise the needed cash.
- Don’t “loan” your credit card to anyone – even a member of your family. It’s a ticket to credit card fraud. Rule of thumb: Always know where your credit card is.
- Limit your limits. If you have great credit, you can get a card with a $25,000 spending limit. Now, that may make you feel like a major big shot but that’s $25K of temptation you’re carrying there, Skippy. So, don’t take on more credit than you need. It invites temptation and it doesn’t look so hot on your credit report, either.
- Finally, open your statements the day they arrive and check them carefully to ensure they’re correct. Any unexplained charges and notify the issuer immediately and close the account. You’ve been hacked.
