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Using your credit cards wisely

A credit card can be a great asset to lean on if you have an emergency come up and they can also allow you to build up credit to show lenders you are financially responsible. This will make it much easier for you to acquire a loan in the future like when you are ready to purchase a home. While credit cards can be a great asset to your financial portfolio, they can also be a huge problem to many people. Credit cards tend to give you access to a lot of money in an instant and if you don't have financial control and financial responsibility, you may end up in a very difficult situation where you are being forced to pay heavy amounts of interest. It is important to understand how credit cards work and how to use them so you don't end up with $9,000 in credit card debt like the Average American has.

When you sign up for a credit card, avoid the mentality of "buy now, pay later". This is why so many people get into trouble as credit cards do encourage you to spend frivolously. You have to avoid thinking you can pay it off later and instead pay off the entire balance each month. Low monthly payments with a high interest rate can take years to pay off and it can destroy your credit. Unmanageable credit card debt can leave a lot of people dealing with financial difficulties and it often leads many to declare bankruptcy.

The one thing to remember is that a credit card is only as dangerous as the person that uses it. If you are a person that cannot control your spending, credit cards are not for you. Credit cards that are used for small purchases and are paid off monthly will build your credit and it is a great way for you to keep your debt under control. This is the best way to build up a great credit rating and it will get lenders to notice. Lenders will reward you with lower interest rates and they will provide you with larger loans for homes and cars. Individuals with great credit have no problem getting approved for a loan unlike the individuals that have a high amount of credit card debt.

Now let's look at how credit cards can be useful in helping you with money management. If you balance your checking account each month you know how annoying it can be to have purchases of $1.27 here and $5.87 there. A credit card can help as you can put the small purchases on them and then pay off the bill from your checking account once a month.

If you are self-employed a credit card can help you to keep track of your business and personal expenses. This way you will know what to deduct from your taxes and what you don't need to deduct from your taxes.

Credit cards allow you to track your spending. If you are wondering where all of your money is going, a credit card is the best way to find out where it's all going. You will be able to see what is going on with your money and to start cutting your expenses.

Credit cards are great assets and many of them come with rewards like airline tickets and other things. This is a great way for you to be able to afford some fun expenses without actually needing to pay for them. Just make sure you are managing the balance on the credit card and that you aren't opening new accounts every time you hear about a new 0% interest rate credit card.

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