Keep these tips in mind when choosing and using credit cards to help avoid falling into credit card debt.
- Shop for the card with the best terms. Beware that"affinity" credit cards that are affliated with a group or school may not have the best available terms
- Look for low or no annual fee on cards
- Seek low interest rates or finance charges
- Refrain from using your credit card for cash advances and transfers. The fees and interest on such transactions are higher than for credit card purchases
- Remove your name from marketing lists by calling 1-888-5-OPTOUT and eliminate the temptation of applying for new credit cards
- Keep credit card receipts to verify that charges made on your card match those on your statement
- Track your spending. Incidental and impulse purchases add up
- Set a spending limit. Only spend what you can afford. Credit is a LOAN, not a gift
- Don't "max out" or exceed your card limit
- Review your billing statement carefully to ensure all charges are correct
- Pay what you owe. Paying the so-called "minimum payment" is a trap: in some cases, just $1,000 of debt could take 12 years to pay off if you send in only the "minimum payment"
- Pay bills no later than the due date to avoid late payment fees, which can increase your balance and cause a hike in the annual precentage rate charged to your account
- Review all notices from your credit card issuer, including changes in terms and conditions relevant to your account and privacy policies
- Secure and review your free annual credit report and learn about your credit score