Credit Cards Friend or Foe

So you just received an offer to have your very own credit card. Just think, you could take advantage of the sales that always come the week-end before your paycheck does; your friends would be impressed beyond belief; and, best of all, your parents would finally have to admit that you really are an adult. Sounds great doesn't it?

Following are a few guidelines that may be helpful, not only to those who are considering the pros and cons of credit card life, but also to those who already have one or more of the powerful little plastic critters in their wallets. Remember, there really isn't any Santa Claus when you are talking about credit, and those little plastic cards sometimes create more problems than they solve. If you do decide to use one, keep the following points in mind, and your credit card will become a useful tool in your hand; one that works for and not against you.

1. Before you obtain a credit card, decide whether or not the advantages you will receive from its use will outweigh the extra costs you incurred in interest and service charges. Some sad users end up owing more in interest than the original cost of their purchases. Be sure this doesn’t happen to you.

2. Don't use a credit card to create an unrealistic standard of living for yourself. Sooner or later, you will reach your credit limit and find yourself unable to maintain that standard. One young man we know reached his $2500 limit on a major credit card and promptly applied for a card from another company. Reaching his limit there, he obtained a third. Now he is faced with high interest payments on his first and second cards and will soon reach the limit on his third. Because he has trained himself to live above his income, a large part of his salary goes to keep up the payments on these cards, and he sees no possibility of getting out of debt for several years. "It was so easy to charge things," he explains, "and I bought things I probably wouldn't even have considered buying if I'd had to pay cash."

3. Try to limit credit card purchases to emergencies or opportunities that will not be repeated. We all have unexpected problems that pop up occasionally, or we find an item we have been seeking for years. These might be acceptable uses for a credit card. Daily expenses and ordinary run-of-the-mill sales are not. Who wants to be still paying in July for a hamburger he ate in March?

4. Never, never loan your card to a friend. If your friend cannot qualify for his or her own credit card, then that friend is certainly not responsible enough to be entrusted with yours.

5. Don't make the mistake of throwing out your budget just because you get a credit card. You still need to plan expenditures carefully and to learn to live within your means. A credit card does not add one extra cent to your income; it merely allows you to pay for certain items at a more convenient time. Too often, that more convenient time never arrives.

If, after considering all the advantages and disadvantages of credit buying, you feel ready to take on the responsibility of using a credit card, spend some time finding out which card is right for you. A reputable online company www.bizjournals.com/resources/credit-card.html offers a free credit search which will inform you about the various terms and conditions of usage of various credit cards, including online application links for each one.

Credit cards, in themselves, are not evil, but the misuse of credit cards can end up being your worst nightmare. One you may not wake up from for many years.