2. Never ever ever use your card to get a cash advance. Ever! This is one of the most expensive ways to borrow money. You’re charged an up-front fee, interest begins to accrue the day you take the money, and interest rates are usually much higher than usual. Additionally, credit card companies can view that cash advance as a red flag that you are having a financial crisis – and cut your credit limit.
3. If you have been caught in a credit crunch and can’t pay that card in full each month, don’t use your cards to purchase food and gas. Using your card for items that will no longer exist when you are paying interest on the bill is very expensive. Using a card to purchase food will not compel you to live within your budget – so you buy that extra steak right when you can’t afford it the most. Some credit card companies have started programs where you can avoid paying interest on purchases of food and gas when you are paying monthly interest. Don’t use it! Pay cash for food and gas purchases so you can keep a firm hold on which items you can afford.
4. Don’t purchase services offered with your card. They are unnecessary, overpriced, and structured to the advantage of the credit card companies. Why do you think they keep calling you to ask if you want these add-on services? It’s not because they like you!
5. Stop! Don’t tuck that card into your wallet! Tuck it away with your important documents unless you intend to use it – or in your sock drawer. This way you can’t use your card unless you have given it some serious consideration (and gone home to retrieve it). The going home time can give you a few minutes to cool off and be sure you really want the item you intend to purchase.
6. But break the above rule a teeny tiny bit. Keep one of your cards in your wallet along with your checking card. This way if you experience a checking card fail, you have a back-up plan right in your wallet. Save yourself some embarrassment because all cards have a problem at some point.
7. Keep all of your cards in active status. Use each of your cards at least once every three months to keep the card companies interested in you! Then make the payment immediately! For example, if you’re planning to go to a movie: charge the evening on one of your cards, enjoy the movie, go home and pay the card off on-line.
Do you have additional tips? Feel free to leave them here!