Helpful Hints for Credit Cards

Some people avoid credit cards like the plague in order to remain debt-free. However, credit cards are not necessarily a bad thing. These plastic cards come in handy during emergencies when you're strapped for cash. Problems arise when cardholders use credit cards for needless shopping and carry huge balances. Instead of shunning credit cards, however, you can learn how to use credit cards properly.

Keep Credit Cards Out of Reach

There is no need to carry several credit cards in your wallet or purse. Keeping credit cards readily available increases the temptation to spend money on unnecessary items such as etxra clothes or dining out. Storing cards in a drawer or lock box until an emergency helps curtail spending and keeps your debt low.

Pay Off New Charges

If you must use a credit card for a purchase, only pull out the card if you are 100 percent certain that you will be able to pay off the balance within a month or a couple of months. Carrying balances for several months and adding new charges to old debts increases the amount of money you pay in interest, and it becomes harder to erase the debt. MSN Money recommends keeping balances below 30 percent of the credit limit.

Avoid Late Payments

Additional fees and an interest rate increase are possible with habitual late payments. Not only will you pay more money each month, but late or missed payments can have a negative effect on your credit rating.

Know Your Interest Rate

The interest rate on your credit card impacts your minimum payment. Read your statements and look for the section that details your annual percentage rate. A shaky or bad credit history typically results in higher rates. But if you have a good score and have never missed a payment, you are likely eligible for a low interest rate. Call your credit card company and ask them to review your account to see if you meet the requirements for a better rate.

Don't Lend Out Your Credit Cards

Giving someone access to your credit cards is dangerous, and if they go on a shopping spree spending hundreds of dollars, you are responsible for the charges. Know the location of your credit cards at all times, and immediately report missing cards and ask your credit card company to monitor your account.