Do’s and Don’ts of using credit cards

CREDIT CARDS FROM B1

LOTTERY FROM B1 dollar spent. Not enough to use a credit card for the mere sake of racking up points. Avoid overspending just to earn rewards, as it may lead to unnecessary debt.

Don’t Carry High Balances or Max

Out Your Credit Card: High credit card balances can quickly accumulate interest, leading to mounting debt. Aim to keep your credit card utilization (the percentage of available credit used) below 30 percent to maintain a healthy credit score. The lower your utilization rate, the better.

Don’t Apply for Multiple Credit Cards Simultaneously: Each credit card application generates a hard inquiry on your credit report, which can temporarily lower your credit score. Apply for new credit cards strategically and only when necessary.

Don’t Ignore Credit Card Statements: Failing to review credit card statements can lead to missed payment deadlines or fraudulent charges. Always verify your statements and promptly report any discrepancies to your card issuer.

Don’t Use Credit Cards for Cash Advances: Cash advances come with higher interest rates and additional fees. Whenever possible, avoid using your credit card to withdraw cash, as it can lead to a debt spiral.

Don’t Co-Sign Credit Cards: Co-signing for someone else’s credit card can have severe implications if they miss payments or accumulate debt. If you decide to ignore this advice and co-sign anyway, be fully prepared to take responsibility for the entire debt if the person you cosigned for fails to pay. Banks make more money on credit card interest than they make on any other loan they offer including personal loans, student loans, business loans, car loans, and mortgages. Banks also make more money on credit card interest than they earn on the money they invest in the stock market. Clearly, they want to encourage you to use credit cards. By following the do’s and don’ts outlined in this article, you can navigate the world of credit cards with confidence. Remember, responsible credit card management is an essential part of achieving long-term financial success.

(Damon Carr, Money Coach can be reached @ 412-216-1013 or visit his website @ damonmon-