In the course of getting out debt there were some people that proclaimed the value of having at least one credit card. To tell the truth, I have yet to chop up my last card, as I have yet to get to the place where I have a sufficient emergency fund in place.
So, in what circumstances should you get or keep a credit card?
If you’re in debt, I would recommend getting one of the many 0% credit cards for debt that you are sure you can pay off in the time period that the 0% teaser lasts. They can save you a bunch of money on balances that you’re trying to get over anyway. You can also make money on 0% cards, if you’re clever and disciplined enough to not touch the money you borrow except for putting it into a savings account.
To make money, you can use Balance transfers to move the money from the card to another account. You can also move money from other cards to a 0% card to save you money. Be careful of the fine print. You want to see how much of a transfer fee is. If it’s a percentage, make sure to do the math over the time period so that you are not paying in fees what you think you’ll be saving in interest.
The other thing that I was constantly reminded of in terms of credit cards is that they can save you money at the gas pump– though fewer cards are still giving incredible rates. Make sure that you research the deal and Compare credit cards to find what is right for you.
Personally, my family is choosing to live without credit, but if you still want to use it, then you should be smart about it:
- Know how the creditors make money.
- Plan to pay it off every month.
- Don’t carry a balance.
- Research the best deal.
- Know the hidden costs.
- Or just don’t do it!
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