The Dos and Don'ts of Credit Cards

Tips on How to Use Them Wisely

NFCC-CC-HeadWe recently partnered with the National Foundation for Credit Counseling (NFCC) and Harris Poll to conduct a financial survey of military members. The military families polled said that they utilized credit cards more than the civilian population—they were also three times more likely to miss a payment and twice as likely to pay less than the minimum each month. We take a look at some strategies that might lessen the impact of credit card debt on your overall finances.

Credit cards are just a fact of modern life. They’re needed to rent a car or hotel room, and can even be quite helpful during an emergency. But they can also be a bit too easy to use, leading to a debt spiral that can be difficult to stop. So here are a few suggested “dos and don’ts” of credit cards.

DO … use them sparingly (say, $50 a month or so).
DON’T … use them for every day purchases (groceries, etc.).

DO … try to pay the balance in full each month.
DON’T … pay just the minimum balance.

DO … try to keep a high available balance, which might help your credit score.
DON’T … keep them maxed out all the time, as that might hurt your credit score.

DO … consolidate if the debt gets to be too much to handle.
DON’T … just keep transferring balances from card to card all the time.

DO … keep the card open if you pay it off; this way, the amount of credit used is low compared to the amount credit available, which might help your credit score.
DON’T … cancel the account immediately, as that reduces the amount of credit you have available and might hurt your credit score.

DO … have one or two cards to help build a credit history.
DON’T … have four or five cards, as that can overwhelm your budget and destroy your credit.

Remember that credit cards are neither good nor bad—it’s how you use them that makes all the difference.

Mark Dye

About the author: Mark Dye

Mark Dye has been writing articles, recording podcasts, and putting together books on personal finance for nearly a decade. His work has been recognized by the American Bankers Association and the Institute for Financial Literacy, and received an 2011 APEX Grand Award for Writing. Follow Mark on Google+.

Contact: Mark Dye


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