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The credit card has become the necessary evil of modern times and is easily the most useful and deadliest thing you can put into your wallet/purse.  We have gone to the trouble of providing five tips to better use the credit card, but let’s be honest, if you can’t regularly pay the debt off each month (not the interest amount, we mean pay off the entire balance), you should simply burn them all

1. Do not get roped into honeymoon deals

Plenty of credit card companies are advertising specials and honeymoon deals despite the global financial crisis (GFC) which was brought on by banks allowing people to overstretch themselves. Generally, the bigger the special, the greater the fees will end up being. Think major stores branding their own cards and attempting to suck you in every time you get to the checkout. Fees on such cards can be crazy.

2. Do you really need a credit card?

These days you can get a debit card that simply uses the cash you have in your account. This way your spending will be limited by the amount of cash you have in your account. Debit cards can be used just like credit cards at the shop and on the net.

3. Pay it ALL off monthly

Just pay it off each month, this way the credit card often works in your favour as you can get cards with an interest free period.

4. If you are a traveller get a card with travel insurance

This can be a great benefit. You should check the travel insurance to make sure it suits your needs and if it does this can save you a minor fortune in travel insurance. More often than not family members travelling with you are also covered under the one policy. Make sure you check the rules! You normally have to pay a minimum amount on your card towards the trip such as paying for the flight ticket to ensure you have the insurance coverage.

5. Don’t let the card control you

A card can play tricks with your personality. It can make you feel good by helping you get all of those extras now as opposed to saving up for them. This is where the problem lies; it creates a false sense of security and allows you to develop a bad habit of simply flashing the ‘plastic fantastic’ without engaging the brain!

Back to the beginning, if you can’t pay off the entire balance each month, get rid of it or otherwise you will be a servant to the card and you will always struggle to get out of the debt spiral.

 

Want more help? We have developed Credit Cards – When It’s Safe To Use Them Checklist This article includes two free wallet sized checklists

What experiences have you had with credit cards? Have you seen them get out of control? Do you love or hate them?  Please post your comments. Thanks

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