Saturday, October 4, 2014

Credit Card WARNINGS and Disclaimer

Using credit cards to buy things is a GREAT way to SAVE MONEY (in the form of cash-back or rewards - whichever you prefer), as long as ...

a) You have good credit (otherwise you may find it difficult to get approved for credit cards).  [More later on the impact of credit cards on credit scores.  But for now I'll suggest you Google the topic.  The short version is that, if you're careful and already have good credit, you could/should actually improve your credit score by having more credit cards.]

b) You ALWAYS pay ALL of your credit card balances off EVERY month, in a timely matter to avoid late fees (if you are carrying a balance on any high-interest consumer loan or credit card - the interest payments and/or penalties for doing so will completely overshadow and benefit you get from the credit card rewards/benefits!!!).  Here's a great LINK on this topic.

c) You don't feel "sucked in" to spending more than you otherwise would if you did not have the cards.  If buying on credit cards causes you in any way (for any reason) to buy stuff you wouldn't or shouldn't otherwise be buying, then RUN AWAY (stick with using cash or maybe a debit card!!).

d) You should NEVER use your credit cards for anything that might be viewed by the credit card issuer as a "cash advance" (whether it's pulling out cash at an ATM or making any sort of financial transaction that could be viewed as a cash advance).  When you do this, you start accruing interest right away and potentially other fees.  This behavior completely eliminates and good you are doing from having a good credit card strategy.

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