1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

Responsible Credit Card Use - Debt Reduction Lessons

(June 25th, 2007)

Credit cards are not as bad as you think they are. I'm going to give you 7 tips for responsible credit card use so that you don't get burned by credit cards.

Tip #1: Never charge more than you can afford. Now I know this seems obvious but its very easy to get a lot more credit than you can really afford to pay back. Do not go on a spending spree and max out your credit cards, because you will have trouble repaying it back.

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Credit cards are not as bad as you think they are. I'm going to give you 7 tips for responsible credit card use so that you don't get burned by credit cards.

Tip #2: Pay back the entire balance at the end of the month. Again, this sounds pretty obvious but most people don't do this. They think, "Just this month, I won't pay the balance in full." And next month? Same thing! Many people just make the minimum payments on their credit card balances. That's not good at all.

Tip #3: Never use your credit card to pay off any other debts. Using your credit card to pay for bills for any month is just disastrous. If you do this, you will just be digging yourself into a deeper hole.

Tip #4: Keep track of all your credit card purchases. Keep on top of all your spendings every month so that you are assured that at the end of the month, you will have enough money to pay off all your credit card balances.

Tip #5: Always pay off the balance before the due date. Use your online banking system to make sure the payments reach the credit card companies on time. If you send your payments via mail, make sure you do this atleast 1 week in advance so that there is no chance of payments being delayed. It's also a good idea to set up an Auto Pay whereby if you do forget to send in your payment one 1 month, the money will automatically be withdrawn from your account. This helps stay away from any late fees.

Tip #6: Don't use your credit card for every single purchase. If you really hate carrying cash, then carry around your debit card. When using your debit card, atleast you are not racking up more debt, you are more like paying cash for the purchase and can actually afford to make the purchase. If you use your credit card to pay for a $50 grocery bill, you could actually end up paying $80 over time for that same purchase. That $20 Blockbuster video rental charged to your credit card could actually end up costing you $30. A rule of thumb is: Only use your credit IF you have to.

Tip #7: Before making any big purchases such as a $1500 Plasma 42' inch television, ask yourself whether you will be able to pay off this entire balance by the end of the month. Do you have enough savings to pay off this balance in any of your other accounts? In other words, can you actually afford to make this purchase? If you say no to any of these questions, don't buy it! In my case, I would actually save up the $1500 in a savings account before making that purchase.