Remember that credit card issuers make money charging interest, sometimes 18% or 20%, or more. Late fees are another source of income for credit card issuers.
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Use Credit Cards But Sidestep Credit Card Debt

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Credit cards are often portrayed as the enemy, the cause of personal stress and large-scale financial collapse. It's no wonder; the average U.S. household has at least one maxed out credit card. Personal bankruptcies are on the rise.

It's worth it to understand the credit card offers that come in your mail; you'll find that some are better than others. The best are credit cards with low interest, no annual fees, and more: some even offer points, discounts and rebates. So how do credit cards get such a bad rap? The missing piece of the equation is consumers who charge beyond their means.

CREDIT CARD INTEREST AND LATE FEES

Remember that credit card issuers make money charging interest, sometimes 18% or 20%, or more. Late fees are another source of income for credit card issuers. When you find yourself owing a large balance on your credit card, don't be tempted to open new credit accounts just so you can spend more.

Avoiding late fees, managing your credit card balance, and limiting the number of credit cards you use are important financial management decisions. When you control your credit cards, they become an asset for building credit, not liability.

BAD DEBT HABITS TO AVOID

If you are an impulse shopper, bad spending habits can quickly magnify your financial problems and lead to a lifetime of bad debt. Spending more than your income is a common spending pitfall. Your unsecured debt, which includes credit cards, should not exceed 20 percent of your annual income.

Using credit cards instead of cash can become a bad debt habit. Because inflated interest rates on your credit card accumulates month after month, you end up paying much more than you're the original cost of your purchased item. While the disposable item you bought loses value immediately, the amount you paid for it continuously increases for as long as you carry the cost on your credit card.

Using new debt to pay off older debt is another bad debt habit. Transaction fees, balance transfer fees, down payment requirements with new credit cards often get you only deeper in debt.

Don't chase bad debt. Pay off current debt wisely, spend carefully, and know the difference between an asset and a liability, good debt and bad debt. Start your wealthy future today; you can do it, on your military pay plus wise use of credit and debt.



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