Your Credit Card: Pretend Money (cont.)
Contributed by Boo Roberts
What is the smart way to use a Credit Card?
What credit card companies don't want you to know is that they only make money from you if you carry a balance and pay their high interest rates on that balance. If you are like I am now, and pay off your credit card each month, the credit card companies don't make as much money from you. I essentially try to use my credit card only for things that I know I have the money.
For example, if I am getting birthday presents for my husband, I know I have a set amount that I have budgeted for that expense. It is already in my checking account. So, if I don't have cash in hand when I go birthday shopping for my husband, I will use a credit card to pay for the purchases I make. Easy, right? The tough thing is trying to remember to only buy what you know you have the money for.
It becomes especially hard when there are all sorts of sales, and boy do those stores know how to advertise a good deal! But the rewards are great when your credit card statement arrives and you know you have the money to pay for it. No feelings of angst, no feelings of dread over opening the bill; you know you have the money to write a check and not worry. And that is the best way to use a credit card.
