Four Tips for Managing Your Credit Card Use

Credit cards make it easy to purchase items you need and items you don’t. But many consumers find themselves in real credit card debt because they can make buying items a little too easy.

How can you avoid falling into this debt trap? Here are four tips to help you keep your use of credit cards in check and avoid financial trouble:

1) Do not use credit cards for major purchases unless its for an emergency or you have the money in the bank to pay off the purchase when your statement arrives. This means that the big screen TV or the trip to Hawaii must be put on the back burner until you have enough cash in the bank to pay for it.

2) Do use credit cards once a month for small purchases like a a tank of gas or for a dinner that you can pay off easily when your statement arrives. Doing this on a regular basis will help to build your credit and will show a good payment history overtime.

3) Do not exceed 25% of your limit on any credit card. Doing so will adversely affect your credit score. Simply put, with today’s FICO credit scoring standards using more than 25% of your credit limit can have a negative affect your credit score.

4) Do check your credit report to find out what’s on it. Be sure to dispute anything that is incorrect. Under the Fair Credit Reporting Act, you are entitled to a free credit report once per year. Request your credit report at Annualcreditreport.com. This is the reputable website established by the three credit reporting agencies to provide consumers with their annual report.