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When it’s cool to use a credit card, part 2

On Behalf of | Aug 2, 2011 | Credit Card Debt, Firm News

In our last post, we left off having given a couple of tips that financial professionals offer regarding credit card use. Keep in mind that everyone’s financial situation is different. Individuals and families have varying histories with credit card debt, bankruptcy and other financial hardship.

The tips from the previous post and this piece are not meant to serve as one-stop advice for you in terms of financial management. The points are simply ideas that you should think about and bring up with financial and legal professionals, depending on your specific circumstances:

Charge away, if you can pay

This tip is somewhat related to the previous tip mentioned in Monday’s piece. If you know that you have the available cash to pay for something, charging a product or service to a credit card can be beneficial. The key is to pay the card balance in full at the end of each month. You don’t want to have to pay any interest. If you do charge something based on the justification that you have the money for it, don’t forget about the charge and spend that money elsewhere. The point is to use the credit card at no extra cost and actually earn points or other card-related benefits in the process.

Improve a credit score

Maybe you have used credit cards in the past in a less responsible fashion. Or maybe you were facing financial hardship and desperately dependent on using credit to get by. Maybe you wound up with such excessive debt that you got to the point of needing to file for bankruptcy.

In cases like these, it is likely that a person needs to work to improve his or her credit score.

A credit score is important when looking for a place to rent or in the case of applying for a loan. A bad score, therefore, has a significant effect on a person’s life. It can be difficult for someone with less-than-ideal credit to be approved to open a credit card. Once approved for even the smallest line of credit, however, a person can use that as an opportunity to rebuild his credit score.

To avoid falling into a debt trap again, it is crucial to only charge small, necessary purchases to the card. Also, only charge purchases that you can afford to pay off by the end of the month. Paying the balance in full each month is what will keep you from paying interest and falling into debt again. It will save you money and improve your credit score.

For more tips on how to use a credit card to your advantage, visit Fox Business.


Fox Business: “Swipe it! When it’s Smart to Pay With a Credit Card,” Kayleigh Kulp, 29 Jul. 2011

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