Spending

• A credit card should be viewed as a convenience. It is not always possible to carry cash around for everything you need, and spending cash often takes longer and fills your pockets with loose change. But too often people who get credit cards view them as a license to spend more money than they would if they were carrying cash. As a general rule, you should only use your credit card to spend money that you already have--meaning you should make sure you have enough cash somewhere else to pay off the credit card debt you incur. This will allow you to pay off your credit card in full each cycle and avoid costly interest payments. Credit card companies often set up card rates and minimum payment schemes to keep card holders in debt as long as possible, to bilk interest payments out of them. By using a card as a convenience and paying it off in full every month, you will avoid getting into a deep hole and improve your credit score.
  
  

Credit History

• Considering the problems many people suffer from credit card debt, it might seem like it's a good idea to avoid them altogether. In fact, having an established credit history and occasionally using credit cards and playing them off in full will increase your credit score, which can lower your interest rate in the future on important debts like car loans and mortgages. Therefore, it is a good idea to keep at least your oldest credit card account open (the oldest account will help your credit score the most, since it establishes you for the longest period of time) and use it from time to time for small purchases that you can easily pay off. Someone who has never used a credit card may have a harder time securing a good rate on a loan, even if he avoided credit cards due to financial responsibility.
  
  

Make a Deal

• Even with knowledge of the dangers of credit card use and a plan to pay off purchases right away, unforeseen circumstances can lead to lasting credit card debt that may be difficult to pay off. If you are in a situation where your credit card payments along with other debts are stressing you financially, your lender may be willing to negotiate with you and reduce your debt. Credit card companies want people to carry debt, but if that debt becomes so burdensome that the person declares bankruptcy, the credit card company loses its money. To avoid this, credit card companies might be willing to reduce interest rates or even slash the amount of debt owed if they think it will increase the chances that they will be paid back over time. Call the customer service representatives at your credit card company and inform them of your financial situation to see if anything can be done to reduce your burden.