Credit cards can be helpful in emergencies or if you are able to pay off the balance each month, but be careful! Cards can also get you into trouble. Here are some helpful hints:
— Watch out for carrying balances. Some cards charge 20 percent or more in interest, also known as "finance charges."
— Read your statement carefully and call the company right away if you have any questions.
— Cash advances are costly: They begin accruing as soon as you take the money out, not after the next statement closing.
— Be aware of annual fees. Many companies charge $50 or more just for the privilege of having the card. You might be able to find a no-fee card instead.
— Watch out for introductory offers! Rates might be low at first, but they frequently jump sharply after three or six months. Note when and by how much the rate increases after the "introductory offer" expires. You may not remember when it expires, but the card company will.
— Think about your purchases. If you are not able to afford the purchase now, chances are you won't be able to afford it in a month when the credit card bill comes in!
— Cut your recreational expenses.
— Call your credit card company. They may be willing to work out a repayment schedule with you.
— Develop a budget and stick with it! Everyone makes mistakes, but don't prolong yours. Bad credit will follow you and hurt your chances for mortgages or other loans later.
— Look into credit counseling services. Many offer educational programs or individual counseling sessions to help you get back on track.
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