Finances

CHARGING

At least once a week while having diner we get a call from a credit card company wanting to provide us with a new credit card. We could write a book of advise about using credit wisely. For many living on plastic has become a national way of life. With so much credit so readily available many have debt levels that equal 25 to 75% of their annual income.

We see the advertising and the effect to credit lifestyles all around us. Almost every toy we can desire can be purchased with a credit card. Travel, computers, sporting equipment, entertainment or almost anything you desire is just a charge card away.

We have heard the advice but some key steps bear repeating:

First, don't carry a balance and charge only what you can pay off each month. Some charge cards don't like this. They want to collect their 10% to 20% interest. Don't feel sorry for them. They get a percentage from each merchant when you make a purchase. If they charge a penalty for monthly payoffs get a card from someone who doesn't charge a penalty.

If you do carry a balance try to keep it on one card. Don't load up multiple cards resulting in lots of payments. Shop for the best interest rate if you carry a balance. You may not have to change companies to do this. You may be able to quote a competitive rate to your current company and they will usually match the rate if they want to keep you as a customer.

Avoid impulse purchases. Buy only items that you planned to purchase and limit spending to the amount you wanted to spend. Avoid high pressure sales messages that you have to buy right now or you will lose some special buying opportunity. Unless the item is one of a kind you should be able to take a 24 hour cooling off period to decide on the purchase.

Credit cards may be safer to carry than cash but if you don't use them with great discipline you may find yourself in crippling debt.

Lost or stolen cards can be used by thieves and can destroy or disrupt your credit rating. You should have a list of your cards and the number to call to report them lost or stolen.

If you want to keep your finances in control you must keep your use of credit in control. Start with a plan on how you will use credit and how you will pay for it. If you find yourself falling behind and accumulating debt look at your invoices to determine what part of your spending has put you into trouble. If impulse spending or unnecessary purchases exceed your monthly ability to pay you need to stop charging.

Bob Berens, Copyright Pending

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