Responsible Credit Card Use

Should you ever use credit cards? Aren't they a pox on your finances? Like anything else, the poison is in the dose. Credit can be a powerful tool in your financial arsenal, but only if you use it correctly.

If you carry a balance on your credit cards, and most people do, then you're first order of business should be to pay it off. Create a budget and make paying off your debt a priority.

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You should not charge anything ever again that you can't pay for out of pocket. So, why use your credit card if you could just use cash or a debit card? Well, here are some good reasons:

But, proceed with caution! These are advanced money techniques that border on wizardry. If you doubt your ability to pay the balance in full each month then do not do it.

Rewards: If you have a credit card that offers rewards in the form of cash back or miles earned towards travel, then rack ‘em up! I have several of our bills being paid through my rewards card and every other month I'm able to cash in the points for a $100 gas station gift card. It's like the lamest magic trick ever! Turn your health insurance into fuel.

Protection: You credit card probably offers added protection when making large purchases or renting a car. If a store even gives you a hard time for trying to return an item you can always have the charges reversed by the credit company. Easy cheesy.

Simplicity: If you're new to budgeting it might be frustrating to gather up all your many methods of payment for review. When you use your credit card for everything you can see all your activity in one place.

Obviously, this will all only work if you keep your head on straight and pay off the credit card every month. Pay it off. Every month. Every single month. Without fail. Pay it off. When I say "pay" you say "it off!" PAY IT OFF EVERY MONTH.