Low Interest Credit Card

Individuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.

There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current “bad credit” credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.

“Bad Credit” Credit Card #1: This credit card charges a very low interest rate for an unsecured credit card. However, your first fine print glimpse reveals that there is a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we’re up to $124 in expenses. That’s got to be it, right? No. Add in another $48 for the annual fee and $6 per month in account maintenance fees. That’s brings the cost of your new credit card to $244 the first year, and $120 each additional year. This is no small change, and a card such as this should be considered only if you cannot be accepted for a better unsecured credit card for bad credit.

“Bad Credit” Credit Card #2: This credit card charges a very high interest rate for an unsecured credit card. This can’t be good. But the setup fee is only $29. Maybe this card isn’t so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but you will also pay $228 a year just to maintain the credit card. There has to be a better offer.

“Bad Credit” Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer’s review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.

Clearly, there are substantial difference between “bad credit” credit cards. Of the three offers we have examined, only one doesn’t take you to the cleaners. In fact, “bad credit” credit card #3 provides great value. All positive changes to your credit history and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, but in the long term, rebuilding your credit with a “bad credit” credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit in the first place.

©2006 Credit Card Depot Inc.

The author is President & CEO of Credit Card Depot Inc, an online credit card information portal.? Credit Card Depot Inc’s flagship website,http://www.credit-card-depot.com, helps over 40,000 consumers find new credit cards every month.? At Credit Card Depot, you can compare “bad credit” credit card applications and apply online for instant approval.

If you’ve had credit problems, then you’ve probably received offers for credit cards aimed at people with bad credit. These offers range from legitimate, to questionable, to outright scams. How can you tell the difference? The answer is to read the fine print, usually to be found in a document called “Terms and Conditions.” To show you the difference between “the good, the bad, and the ugly” in the low-end credit card market, let’s take a look at the fine print associated with such offers.

We’ll start with one of the more popular low-limit “starter” cards available today. These are actual terms published by a major company at the time this article was written. The card comes with a Visa logo on it and looks like a regular credit card, so you can use it as an extra piece of identification when you’re booking a hotel room, renting a car, and so on. In the “Terms and Conditions” document, the first thing we see is the annual percentage rate (APR), listed as 19.5%. That’s not a particularly attractive rate, but it’s not as high as a lot of other cards. A little farther down, we see that the APR for cash advances is higher, 25.5%, which is normal since there is greater risk involved to the company.

Where it really gets interesting is the section that lists the fees associated with the card. In this example, there is an annual fee of $150! There is also a $29 fee to open the account, as well as a monthly “maintenance” fee of $6.50. Whew! That’s a lot of fees. But wait! It gets better. Toward the bottom of the document, buried in the fine print, we see something called “Available Credit Limitations.” In 8-point typeface (very tough to read on a computer screen or printed page), you are informed that your generous initial credit limit will be a whopping $300. On your very first statement, you will be billed for the $150 annual fee, plus the $29 setup fee. The $6.50 monthly fees will start appearing after you make your first purchase on the card.

Let’s take a closer look at the math here. It will cost you $179 up front, plus $78 per year, to obtain $300 worth of credit. Your total cost for the first year is $257, assuming you pay off the balance each month and don’t incur any regular interest charges. Sound like a good deal? Does it make any sense at all to pay $257 to obtain $300 worth of credit? That’s 85.6% in effective interest! If you keep a running balance of $300 on the card, and just make the minimum payments every month, your effective interest rate will be 105.2% for the first year, and 95.5% for subsequent years. That’s some pretty expensive credit! This credit card offer, while legal, still counts as a total rip-off.

As bad as the above sounds, it still only qualifies as “questionable” rather than being a full-on scam. There are much worse offers floating around out there. I’ve even seen some “deals” where the fees are so stiff you start out above the credit limit before receiving the card in the mail! In the bogus category I’d also include cards where you are forced to pay an advance fee prior to receiving the “guaranteed” credit card, which of course never arrives. There are also “catalog cards,” where you supposedly build credit by purchasing items through a card tied to one particular company and their catalog of goods. The problem is that the catalogs usually consist of grossly overpriced junk.

So what constitutes a good credit card offer for someone who’s experienced serious credit problems and wants to take action toward rebuilding his or her credit? At the risk of annoying the big credit card marketing companies who target the “sub-prime” market (consumers with bad credit histories), my advice is to completely avoid any offer that comes to you unsolicited. Instead, do the research on your own. Check out http://www.bankrate.com for current offers by legitimate credit card companies. Shop and compare before you apply. Remember, the APR is only one aspect of your decision, and not necessarily the most important. What you want to look at very carefully are the annual fees, setup fees, and monthly fees.

It’s important to realize that you may not be able to obtain an unsecured credit card when you’re just starting to rebuild your credit. Instead of paying $257 to obtain $300 in credit, you’d be far better off placing $250 as a deposit toward a good SECURED credit card from a reputable major bank. In this real-world example, the annual fee is only $29, the APR is 19.99%, and there are no setup fees or monthly maintenance charges. Your $250 deposit will net you $250 worth of credit (less the $29 annual fee), and you’ll build positive credit history just as quickly as with the ridiculously expensive offer discussed above. Plus that original $250 deposit is still YOUR money. After you’ve been granted unsecured credit again, and you’ve paid off any outstanding balance on the secured card, you can get your deposit back.

One final tip. If you have the opportunity to join a credit union, you should consider checking out their offers for low-limit unsecured and secured credit cards. Credit unions frequently offer much better terms than regular commercial banks. Through credit unions, you can often find credit cards with no annual fees, lower interest rates, and more flexibility. Be sure, however, to confirm that the credit union reports account activity to the credit bureaus. Otherwise, your positive payment history on the new credit card won’t lift your credit score. And remember, no matter what card offer you’re considering, be sure to read that fine print!

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation’s largest debt settlement firms, he is the author of the Debt Elimination Success Seminar?, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation. The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost. http://www.zipdebt.com

A secured credit card is a real credit card, that is accepted everywhere a “regular” credit card is. You can use a secured card to order online, to rent a car or hotel room, or to pay for things in a store. The only difference between a secured card and a traditional card is that you need to make an initial deposit to “secure” your line of credit.

This deposit is held in a low interest savings account, and will be returned to you when you have either closed the account, or upgraded the card to a traditional, unsecured card.  By making a deposit, you give the bank a safety net-if you default or don’t make your payments, they keep your deposit.

You still need to make monthly payments on your secured credit card. A secured credit card can be a great thing-it can help you rebuild your credit if you have had some financial trouble, or give you your first start if you have no credit history at all.

As great as a secured card is, whether you are using it as your first credit, or as a “second chance” at a good credit rating, there are some pitfalls you should be wary of when you decide to apply for a secured card:

Application fees: The ideal card has no fees-you will already be making an upfront deposit, so you shouldn’t have to pay a set-up fee as well. Treat any application fees with a healthy dose of skepticism, and make sure that all of your deposit is truly going into a savings account. So, if you deposit $300, make sure that $150 of it isn’t going towards an application fee!
High interest rates: Your secured card will have an interest rate attached, but try to avoid the ones with super high rates. You should also check your statement each month to be sure your rate hasn’t crept up while you were not paying attention.
Maintenance fees: Read your statement carefully to be sure there are no additional monthly fees attached. Some low end secured card providers will charge a monthly service fee, simply for having an open account-and that fee is on top of the interest charges you will pay each month!
Conversion: Make sure you have the option to convert your secured card to a traditional, unsecured card. If the bank  you are applying with only offers secured cards, then there will be no way for you to upgrade to a “real” credit card after  you have proven yourself to be credit worthy.
Make sure you are not automatically signed up for additional services, like insurance or identity theft protection. These optional services may be tacked on automatically, and you will need to withdraw from them to avoid the substantial fees associated with them.

Aubrey Clark is an Author and editor for Direct Banc, a low interest rate financial directory. Aubrey has spent over twenty years working and training employees in consumer finance and bank secured credit.

Not every credit card is a good one – just because it promises a few good things. The truth is, that you really do not know just how good a credit card might be until you read the fine print that gives you all of the details. Merely comparing a few of the more open and upfront (on the advertisement) features might give you a starting place, but you should go a little deeper than that in order to get a credit card that is worth having.

Choose a type of credit card that you think will benefit you the most. Make your choice from either air miles cards or drivers cards if you travel a lot, or get a rebate card for general shopping purposes. You can also choose specialty cards from booksellers if you purchase a lot of books, or entertainment credit cards if you frequent this type of place. You will do well to take a little time to see what kind of different credit cards are available. Make your choice related to the things that you normally charge the most amount of money each month.

A good place to start is by looking at the interest rate. Interest rates can range from 9.99% up to a little over 18%. The lowest rates of interest are for those who have good or excellent credit. Anyone else can expect to get a card with a little higher rate. Ideally, you want to get a card with as low a rate of interest as you can. While you may not pay any interest in the first year, remember that it will be charged during the second year. It can also be started suddenly if you make a single late payment on some credit cards.

Then you will want to look and find out if the credit card allows you to make balance transfers – and when. This little great feature can really save you some money if you can get it with 0% APR interest and no fees attached. Be sure to find out when you can make the transfers, though, since some cards require you to list any transfers when you apply, and no more can be made after that. See also just how long you can enjoy not having to pay any interest on this amount. It could be anywhere from three months to the life of the transferred amount.

The introductory offer should be looked at next. This includes the balance transfers but also tells you just how long you have to make new purchases and pay 0% APR interest on those charges. The length of time on your introductory offer and the time on your balance transfers may be different.

Lastly, look at the amount of rewards and compare them. Some credit cards will give you a large number of points or miles when you make the first purchase. This is great and can really be a big help since other cards may not offer this kind of deal. Be sure to see, though, whether or not various fees or limitations in some way eat up this great value attached as conditions. Also, many, but not all, credit cards will give you a percentage of your average purchases, such as what you charge on gas, food, and medicines.

By paying off your credit card in full each month, you can enjoy a greater level of savings by not having to add on any late fees or interest. Watch out for credit cards that require minimum balances.

Joe Kenny writes for the Credit Card Guide, offering views on UK credit cards, visit CardGuide.co.uk today for cash back credit cards and find a great UK credit card deal today.

After you have your car loan approved and you finally pick up your sparkling new car from the showroom your focus may soon turn to getting rid of your debts as soon as possible. Every prudent borrower has a budget to live by and one of the critical points of a budget is to minimise expenses. And one of the best ways to minimise monthly expenses is to get rid of debt, especially cards.

It is no secret that credit cards are the bane of many consumers because using easy credit and soon result in unmanageable monthly repayments. Once you are in this spiral it can be difficult to keep your head above water and you may become susceptible to offers of further credit which make consolidating your debt look quite attractive.

One of the more innovative ways that lenders have attempted to seduce consumers is to offer low interest rate cards to consolidate existing credit card debts. On the surface, this might seem to be a strange statement. Surely a credit card at 2.99% is better than the credit card charging 17%? Well, the answer is yes and no. Yes, a lower interest rate is better for a consumer, but not if the conditions which attach to the card make it ultimately more expensive.

Let’s look at how this can happen and what you can do to avoid the trap.

Whilst not every credit card lender is the same, many attach a string of conditions to these low-interest rate credit that have a sting in the tail far greater than most consumers imagine. Let’s take a look at some of the traps so you can avoid them.

Once you have transferred the balance of your old credit card to your new low-interest rate card there will be a strict timeframe over which the low interest rate will apply. In some cases it might be 12 months, or in other cases as little as 6 months. At the end of this period the credit card will revert to its normal rate which may be higher than the original card! This is a condition which you should always check before signing up, if you cannot pay out the complete debt within the timeframe stipulated you may be better off making extra repayments with your existing card.
If you use your low rate interest card for further purchases it may negate the low rate on the transfer debt. For example, if you transferred $10,000 to a new low rate card at 2.99%, you will certainly benefit from the lower rate of interest, but if you use the card to purchase something else the low interest rate may cease to apply and the normal rate of interest will now apply to the entire debt! That’s why is important to check the fine print before you make a change. Make sure that you only use the credit card for the transferred debt and never use it for any subsequent purchases.

These two simple points prove the fact that you need to be vigilant when applying for any car loan or credit card offer. Check the details before you make a final decision.

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According to statistics in a recent survey, less than half of those who apply for a credit card shop around at all. They either accept the credit card offered by their bank or another organization, or they fall prey to a credit card advert that lands in their post box. Is that any way to find the best credit card deal?

The question is rhetorical, obviously – but what’s not rhetorical is the need to do a bit of homework before you apply for a credit card. The wrong choice can cost you thousands of pounds over the course of a few years.

Some wrong choices jump right out at you. If you can qualify for a low interest credit card, you’d be a plumb fool to apply for one with an APR of 34%. Keeping your eye on the average typical interest rates can help you avoid applying for credit cards that offer outrageously high interest rates.

Other times, though, it’s not so easy to recognize which credit cards to avoid. As often as not, it’s a matter of using a perfectly good credit card for the wrong purpose. Low interest balance transfer cards are a good example. Most people are drawn to low interest balance transfer cards because of the low APR on transferred balances. They usually carry a higher rate of interest on new charges to your card. They also usually apply your payments to the balance transfer first. That means that until your transferred balance is paid off in full, any new purchases that you put on the card will sit and accumulate interest – on which you’ll pay interest.

Bottom line: avoid using a balance transfer credit card to make purchases.

Store credit cards offer some of the highest interest rates of all types of lending. Those high APRs are often hidden behind a special offer – pay for your purchase on a store credit card and get no interest for three months, or until the end of the year. Be careful to read all the fine print on those offers. It’s not unusual for the no interest to be contingent upon having the balance paid in full by the end of the interest free period. If it’s not, you could find yourself whacked with the entire interest from the date of purchase. Other things that may invalidate a no interest store card offer include late payment, going over-limit or missing a payment.

Bottom line: Avoid using a store credit card unless you use it for a special promotion – and abide by all of the stated terms.

If you make it a practice to research credit cards before you apply for one, you’ll be able to spot which credit cards to avoid on your own. Moneyeverything.com makes it easy to compare credit cards and find the best credit card – and the ones to avoid.

Jon Francis has been involved in various areas with the world of finance and has a keen eye for a bargin! He has an in-depth knowledge of the credit card UK market and now helps others get the best from a credit card. For more information visit “http://www.moneyeverything.com”.

In the past, rewards credit card were limited to cards with Frequent Flyer Miles Programs. Today, as credit card rewards holders continue to grow and as the competition among credit card companies grows even stronger, the emergence of rewards credit cards is undoubtedly an effective marketing strategy in attracting clients.

With this in mind, it is obvious that not all reward credit cards genuinely bring rewards to its users. Therefore, as a consumer, it is your responsibility to be aware of reward credit cards that offer great deals and those that do not. In this article, let’s discuss the features you should look for and the things you should avoid in a reward credit card.

Features to Look For

The Right Kind of Reward. What particular reward program can you benefit most from? Are you a frequent traveler? Do you drive a lot and spend a lot in gas? Or do you just use your credit card for shopping and groceries? Whether you choose a Frequent Flier Credit Card, a Gas Reward Credit Card, or a reward credit card with Cash Back- what matters is that it matches your spending habits and your lifestyle.

Reasonable interest rates. Obviously, you’ll want a reward credit card with a reasonable APR. Yes, you can avoid the interest rate by paying your balance in full each month but you can’t always guarantee that you won’t need to carry your balance over for the next billing cycle. The interest rates alone can kill the value of your rewards. Always be on the safe side by choosing a reward credit card with low APR.

Reasonable fees or no fees at all. Aside from a low APR, check out the other credit card fees such as the annual fee, late fees, etc. Some reward credit cards with good APR have no annual fees at all. Clearly, you can get more from your credit card if you won’t have to worry about additional fees from time to time.

Things to Avoid

Reward limits. A reward credit card may limit your rewards to only a maximum value. For instance, you can earn points but as soon as you reach $5,000 value, that’s when you stop qualifying for the rewards. You’ll want to stick with reward credit card that will last you a long time and not just for short period.

Blackout dates. Blackout dates often defeat your purpose of getting a reward credit card. Some reward credit card companies will not allow you to use your points at high travel times such as Christmas & Thanksgiving. You need to make sure you are aware of the blackout dates so you can properly plan your vacation.

Forfeit your rewards. Restrictions are always part of the deal. For instance, you may strive to rack up your points for the whole year to get your travel reward. But if you fail to earn enough mile points, would you be able to carry over your collected points for the next year? Or will all the points you earned be forfeited and you’ll have to start from zero all over again?

Also, the timeliness of your payments is a major factor in getting your rewards. If you delay a single payment, you may be disqualified from the rewards program. Make sure that you clearly understand your reward credit card’s terms and conditions on collecting and redeeming rewards.

Copyright (c) 2008 Ann Wilson

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How to avoid debt, and in particular credit card debt, has become a major issue in most people’s lives. We’ve discovered, in recent years, that we aren’t always going to have someone there to bail us out if it all goes wrong; so what do we do?

In this article we’re going to look at how to avoid debt from credit cards. We’ll start with why people seem to run up a large credit card debt, then we’ll have a look at how much this seemingly free money is costing us, and, finally, we are going to look at some ways of crunching the credit card debt.

Why are people constantly adding to their credit card debt?

Isn’t it a real hassle to carry money around with you? You go out to buy something and then find that, for just a few dollars more; you can get something else that you think you might really need in the future. If you’ve only got enough money for the thing that you originally went out to buy – what are you going to do?

Did any of that sound familiar? If it did you’re not alone, and the credit card companies know it.

We are living in an age where instant gratification is actually possible, and actually expected by most people. There used to be a time when you had to save to get the thing you wanted, and save even more if you discovered something else that would go really well with it. But all of that has changed over the last couple of decades.

People now use credit cards for the majority of their transactions, and are constantly surprised when the amount owing on the credit card mounts up. Part of this is down to the ease of use of a credit card and part of it is down to the fact that we don’t really equate the money being added to a credit card with actual money being paid to someone. Would you spend quite so freely if you were physically handing over cash as opposed to handing over a bit of plastic?

How much is this debt actually costing us?

Most people don’t realise that the amount owing to the credit card company is going down by very little each month. The card companies take the majority of your monthly payment and pay off the interest you owe first. That means that if you just pay them back the minimum amount of money on the statement then, several months down the line, you will have paid off very little of the actual money you put on the card in the first place.

As a quick illustration of just paying the minimum per month we’ll go for a modest outstanding credit card debt of $2000, an APR of 17.9%, and a minimum repayment of 2% or $5 if it’s the smaller of the two. Based on those figures your $2000 debt would take 35 years and 2 months to pay off, and the interest alone would cost you $4,091, just a touch over twice the amount of the original debt on the card.

Of course, all of that assumes that you don’t continue to use the card when you’re shopping.

If you have an offer to transfer a balance to that account you will, in the case of most card companies, be paying off any debt already on the card first. That means that the incredibly low rate you got when transferring may not make any difference to you, not if you haven’t started to pay it back before the lower rate finishes and you’re paying back at the full rate.

Do you know how much interest you’re actually paying back to the credit card company? There can be a huge difference in the amount of money you may be paying back to one card company in comparison to another card company.

So, how do we avoid debt from credit cards?

The simplest way would be to cut them up, but most people won’t go that far, so let’s look at some alternative solutions.

The first is to only put money on the credit card that you’ll be able to pay back by the end of the month. If you can pay the money back before the interest is due to be added (because the interest isn’t instantly added when you make a purchase) then you will have been able to buy the things you needed without them costing you any extra.

The next thing would be to look at using money you have ‘saved’ so as to clear your cards. Let’s say (to simplify the maths) that you are earning a whopping 10% on your savings of $1000, but, you have $1000 outstanding on a credit card at 20%. Over the course of a year you would earn, from your savings, $100, you would pay the credit card company $200 in interest, meaning you actually lost $100 over the year. If you take the money from the savings, and pay off the card, you have suddenly saved yourself $100 – even more if you weren’t going to be able to pay it back within a year.

Consolidation loans always sound like a good idea, but are they? You will be paying a lower interest rate, but you may be locked in for a certain length of time. To get out of some of these loans can often mean paying the equivalent of two to three months worth of interest. If you’re thinking about taking out a loan, and expect to pay it back quicker, try calculating what would happen to the credit card debit if you paid it on that instead.

Always check out your options thoroughly.

So, what have we learned about how to avoid credit card debt? First, having no credit cards is a good place to start, but not always practical. If you must spend money on them then try to only spend money that you can repay within a month. If you have to over spend, then using as much of your savings as it takes is by far the best repayment option. Never pay back just the minimum, and always know your interest rates.

If you follow this advice you should find it a lot easier to avoid credit card debt.

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Don’t you just hate it when you think you’ve found something great, only to find out later that it’s a real dud or you’ve been taken advantage of? It happens all too often in the credit card industry and that’s exactly why you need to know how to make good credit card comparisons. Here are six tips to help you make the best comparisons so you don’t get that sick feeling deep in the pit of your stomach.

Look online – There’s so much competition in the credit card industry that there is no shortage of sites that help you with your credit card comparisons. They list their rates and fees so you can check out their offer.
Check those balance transfer fees – There are just too many credit cards today to choose one that will charge you to transfer your balance. Never pay a balance transfer fee. After all, it’s in their best interest for you to have a balance to transfer isn’t it? They’re going to make money off of the interest they charge you, so make sure you don’t pay them extra for this.
Choose the lowest interest rate, but be sure to check how long that interest rate is good for. It won’t do you much good if it is only for 3 months after opening the account. Many companies offer a low introductory interest rate for an entire year.
Look for interest free offers – If you can’t pay off your credit card balance each and every month, you need to search high and low for one of these cards. This will save you a great deal of money over the long haul.
Check out the rewards offered but make sure if you choose a rewards card the rewards are ones that you will actually use.
Don’t choose rewards over a lower interest rate. It will benefit you much more to get the low interest rate.

Now that you see the importance of making good credit card comparisons, you will see getting a card in a new light. Use this information to your advantage and don’t let the credit card companies take advantage of you.

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We all know one thing for certain – there’s no shortage of credit card offers out there. They bombard us from seemingly every direction: on the internet, through the mail and everywhere else! Maintaining your credit can be a difficult thing; and getting the credit card which you really want can be harder still.

Shops are always very willing to give you a discount to induce you to sign up for a card and of course, an extra 20% off is tempting. However, after this one time discount you find yourself faced with yet another monthly bill for this new card.

Really though, the problem with credit cards is that when people use them, they don’t think of it as spending money. There’s no less cash in your wallet or purse afterwards; making it all too easy to just produce the plastic in any situation, which can lead to overspending.

Credit cards were not created for people who are on a tight budget – each month you must make a payment. Even if you make the minimum payment and avoid late fees, it can still take decades to pay off your balance!

Think about how long it would take to pay off your credit card debt in full; that is, if you never charge another cent to it. You should never apply for a new card to pay off an old one, except in the case that you can take advantage of an introductory interest-free period which is long enough for you to fully repay your outstanding balance.

Almost everywhere you go, the major credit cards will be accepted., so there is really no need to have an entire wallet full of different cards. Keep the number of cards in your wallet to two at most. More than this can make it all too easy to lose track of what you have spent and saves you the headache of managing several different credit card bills every month.

Another temptation held out by credit cards which you should avoid is cash advances. These are certainly convenient but come with a high interest rate which is computed daily by our credit card company – you can easily end up owing a lot more than you expected this way.

If you tend to succumb to this temptation at the ATM often, you will find your debt growing rapidly; the interest rate in cash advances can be as much as 24%! Remember to use cash advances only in genuine emergencies. Try instead to look for a no-frills card – one which has no annual fee, a low APR and no rewards programs.

Using a credit card wisely can help you to establish good credit – but only if you are careful and avoid the pitfalls of temptation. Make your payments on time and keep your credit rating strong; you’ll pat yourself on the back for this when the time comes to make a large purchase such as a car.

As much as a lot of people love to shop, it is definitely a luxury and not a need to do so. Cash advances and paying your credit card bill late are equally so. All of these things will affect your credit rating, so spend only what you can repay in full each month if you plan to use your credit card to build your credit rating.

Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer credit card comparison site helps consumers find the Best Credit Card while avoiding high interest rates, charges, and fees.