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6 Tips for Wise Credit Card Usage

by Guest on November 8, 2011

With all the credit card debt out there, it seems like it would be helpful to define what appropriate credit card usage is.

This begins with a preliminary observation. That is simply this – credit card usage is a choice. Thus, if you’ve proven to yourself that you can’t use them appropriately, then you’re better off (and so is your bank account) if you simply stop using credit cards.

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1. Always pay off your balance in full every month.

Good guidelines always have good consequences. In this case, I suggest that if you ever go beyond this rule that you should either stop using credit cards for a six month period, or stop using them all together.

Credit cards in the hands of people who don’t pay off their bills are a very dangerous thing.

2. Never purchase anything over $100 (or a similar threshold) on a credit card unless you decided to buy it before you left the house.

This has been a long standing rule in our home. If I’ve left home with the plan to buy a TV for $300, then I can use the credit card because it is not a spontaneous purchase. If, however, I’m standing in front of a nice new TV, I cannot use the credit card because I may be tempted to go beyond my budget.

3. Never purchase anything over $100 (or a similar threshold) on a credit card without discussing it with your spouse.

Discovering a larger than normal purchase when looking over the bill at the end of the month is not an appropriate way to find out about a household expense. Communicate with your spouse beforehand.

4. Always review your monthly statement.

One of the keys to credit card usage is paying attention. I remember a few years ago when I noticed a charge on our credit card bill. I came to find out that I had signed up for something that would continue charging me every month until I cancelled. By reviewing my statement I was able to catch this discrepancy.

5. Always purchase electronics on your credit card.

One of the nice benefits of credit cards is that they offer certain purchase protections and warranties. You can review the terms and conditions on your card to see what benefits you have. If you pay with cash, you’ll lose out on this benefit that is included with your card. Remember, you should follow this in line with the other appropriate usage tips above.

6. Always maximize your credit card rewards.

If you are responsibly using credit cards as I’ve outlined above, you may as well be getting some credit card rewards out of your spending. This can be in the form of cash back rewards, travel rewards, or both. As an example, the Chase Sapphire Preferred card allows you to earn Ultimate Rewards points. Those points can be used to buy gift cards, purchase travel, or transfer to select frequent flyer mileage programs.

What guidelines do you use to help regulate your credit card spending?

This is a guest post by Craig Ford. At Help Me Travel Cheap Craig teaches people how to find the best travel credit card sign up bonuses so they can get free travel.

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