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Debt and the Use of Credit Cards

May 24, 2008
I am sure that you, too, get inundated with lots of junk mail. At least weekly I get an application in the mail to apply for American Express, Visa, Mastercard and other companies credit cards. Many come with data filled out already and wanting me to apply for their card.

Carrying another credit card can make it hard to stay within your spending budget and you may be tempted to buy things you cannot afford to pay for. The interest rates may appeal to you by seeming low, but keep in mind that our nations credit card debt is increasing.

Before you accept one of these offers ask yourself if you will be paying it off each month. If so, the interest rate is immaterial since you will never accrue interest. If not, choose one with a low interest rate and make regular payments to pay it off as quickly as possible.

Incentives and rebates are very tempting on the credit card offers, but will they benefit you? If you have to overspend to meet the requirements for the rebate or incentive you will not be able to take advantage of them. If you can make the regular purchases you have already budgeted for AND meet the requirements then it may be a good option for you.

One financially healthy way to use a credit card is to put small regular expenses on them and pay it off each month. Some expenses, like groceries, that you have every month you are going to pay every month anyway. This helps build a sold credit rating without getting into debt.

If you are already in debt, consider cutting back on luxury purchases to pay more on your credit card bills. If you buy lattes 4 days a week instead of 5, you can use this to reduce your debt. It will not get your out of debt to increase your use of credit accounts or transfer balances from one to the other constantly. Make a commitment to pay a certain amount a month and do it to get all your bills paid.

Making a simple spreadsheet to show how much you owe and how you are repaying your debt helps in several ways. It helps you track the progress you are making, shows how much you still owe, shows where your money is going, and helps you make decisions not to buy things that will put you further in debt and lose ground on your progress.

Reward yourself when you have paid off your debt. But, don't do it by running out and charging something! Go to the library for a DVD you want to share with the family, go for a walk with your spouse, or find other ways to enjoy things that are free and don't involve overspending and getting back in debt.

When you decide to make a large purchase with your credit card, plan how much you will pay back every month and take the responsibility to do it. Money is valuable so take using credit cards seriously and you can live a good, debt free life.
About the Author
Find more info and a great selection of rebate credit cards right here. Visit Top-Ten-Credit-Cards.com for the best credit cards .
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