I know from experience. I’m going to share a secret with you. It’s a secret that I’m not proud of but it happened and I’ve dealt with it. I had to declare bankruptcy after my divorce from my first husband. The majority of the debt was credit card debt. It seemed like we had a card from every company that would offer us one. After I graduated from college, the offers poured in and they would send the card without me even applying for them. The stack was bigger than the one pictured. It didn’t take long before those cards were maxed out. I didn’t have a job after the divorce and bankruptcy at the time seemed to be the only option I had. I’ll tell you which bankruptcy I chose and why in a later post.
Back to credit cards. After much reading and prayer, I’ve come to the conclusion that for me, it is ok to have one or two low limit credit cards. Why? Because I travel to Tennessee a couple of times a year and the Frugal Hubby and me travel to New Mexico several times a year. It’s convenient to have the credit card to hold the reservation and to use at gas stations. It’s also convenient to have them to pay for airline tickets. I think it’s entirely up to each individual as to what they can or cannot handle.
Having said all that here are 4 Do’s and Don’ts for credit card usage:
- Choose your credit card carefully. Ask yourself whether you want to pay a fee for a credit card. “When considering a new card with a fee, look at what the card offers for that fee,” says Gregory B. Meyer, Community Relations Manager at Meriwest Credit Union in San Jose, Calif. “Do they offer travel protection or travel insurance? Do they offer rewards points? Do you get discounts from airlines, hotels or stores?
- Pay your credit card balance in full every month. If you don’t pay your credit card, you are wasting money by paying interest on the balance. Most credit cards have an interest rate of 18% or higher.
- If you miss your credit card payment by a couple of days, call the credit card company (the number is usually on the back) and tell them what happened and that you are sorry. Ask if they can waive the late fee (usually $25 to $35). Remember to be friendly.
- Don’t go over the credit limit. Another way of putting it — don’t go on a spending spree and max out the card. Remember you are going to try and pay it in full each month plus they charge an over-the-limit fee.
There are more do’s and don’ts regarding credit cards. Please leave us a comment and let us know what some of your do’s and don’ts are. As with any article, there are some disclaimers that have to be made. Here’s ours! Please remember that The Frugal Housewife is not an expert in the personal finance field. This article is simply written from The Frugal Housewife’s experiences. The Frugal Housewife is not responsible for any reader misuse of credit cards or financial decisions regarding the use of credit cards as a result of reading this article.
Till next time,
The Frugal Housewife