How To Use The Credit Card For Your Advantage

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Don’t use a credit card to finance an unaffordable lifestyle. If you can’t pay off the entire balance every (or almost every) month, then you are overspending. Use these guidelines to determine what you should and shouldn’t charge:

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* You have cash in the bank to cover the purchase. If you have sufficient cash in the bank to make a purchase, go ahead and charge it if you wish. Then pay off the balance in full when you get the statement.
  * You don’t have enough cash to cover the purchase, and the item is not for an emergency. If you don’t have enough cash to purchase the item or service, don’t charge it. Instead, save your money (preferably in an interest-earning savings account) until you can afford the purchase.
* You can’t afford the item or service, but you need it right away. If you can’t afford an item or service, but need it now (for example, you must repair your car so you can get to work), charge it. But, at the same time, make a plan to pay off the balance over time — figure out how much you can pay each month and how long it will take you to pay the balance off. Then, stick to it.
* Don’t charge something if it won’t exist when the bill comes. A good way to cut down on credit card debt is not to charge anything (like a meal, groceries, or going to the movies) that won’t exist when the statement arrives. By paying cash for these kinds of things, you save your credit for true necessities.

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  1. One Response to “How To Use The Credit Card For Your Advantage”

  2. By Richard on Jan 21, 2010 | Reply

    I always use the credit card when I am witout money in my bank account. That is why I am always broke!

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