Charge sense: Don't bury yourself with your credit card

  • Article by: Andrew Newman
  • Updated: May 24, 2009 - 11:07 AM

A credit card brings you into the adult world, but it needs to be used with care. Many people under 30 have charged themselves into five-figure debt.

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id10tsMay. 24, 0912:28 AM

What do you mean. Every time I turn on the radio, I am told I dont have to pay for the debt I irresponsibly racked up. The reason interest is so high on credit cards is because so many people dont pay them and default on their debt. The only way to use a credit card, is to pay it off at the end of the month. Its not free money.

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bradtheissenlaMay. 24, 09 1:22 AM

There is no reason for "credit" to cost more than 2 points above Prime Rate. Remember when?

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thinerMay. 24, 09 6:16 AM

Do not get overextended - spend more than you make. We did that and then used our credit cards to live each month. When one would get to the limit we had to open another one and the vicious cycle started. Robbing Peter to Pay Paul. It is our own fault. But with the credit companies giving away credit to anyone it was easy to get into trouble. There should be credit for buying a vehicle and a home. The rest you really should save your money for and buy it when you can pay cash. If you say you need a credit card for an emergency - have a savings account for emergencies.

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wearebrokeMay. 24, 09 9:27 AM

i guess you don't understand where the loses for CC comes from. the loan loses have been increasing since entering the recession and the tanking of home prices. so if you think they are taking advantage of you don't use the cards go to cash.

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dahutysMay. 24, 0911:04 AM

I think the best way to build up a credit history while minimizing the risk of running up debt is to use credit cards only for the things that you would buy anyway: groceries and gas. As long as you have enough discipline to remember that the money for food and gas only comes out of your bank account once a month instead of at the moment it's purchased, and leave the card at home if you're not going to Rainbow, that will help you avoid impulse purchases.

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psegerMay. 24, 0911:51 AM

Remeber - "Credit does not equal income. Credit equals debt."

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geminosMay. 24, 0911:59 AM

It's okay to charge for gas, groceries, monthly cell phone, gym membership, car insurance..so long as you pay off your card IN FULL every month, and you can get points too. When I pay my bank issued credit card in full every month I know I am paying my monthly expenses. I use the card as a tool to track my spending, and at the end of the month I write one check from my checking account.

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RipAndersonMay. 24, 0912:29 PM

One way to make sure you have enough to pay it is to carry cash in your left pocket. If you charge $30 at Target take $20 from your left pocket and put in your right. When you charge $20 at the bar on your night out take $20 from your left pocket and move it to your right. When your left pocket is empty it's time to go home, no more charging 'till you get more cash for your left pocket.

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RipAndersonMay. 24, 09 9:56 PM

For a secured line of credit to highly credit-worthy borrower? True. That's about what I payed on the line of credit I had secured by my previous house. But for a non-secured loan? No. You need to charge more to handle the risk. My credit card interest rate is 13.24% (on any balance I don't pay off every month) which is about double what I was paying on my HELOC. But it makes sense, the CC loan (if I take it) is unsecured, and IF I start running a balance instead of paying it off every month I'd construe that as a possible indication of higher risk.

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