1
– Choose a card with a fee, high interest rates and poor customer service.
Everybody
uses credit differently. Some people
use credit and pay their balances off in full every month. However, for those of you who carry over a
monthly balance, it would be in your best interest to find a card with a low
annual percentage rate and no annual fee.
The new pair of jeans that you bought on sale for $60.00 with your
credit card could turn into $80.00 pretty quickly. Interest and finance charges can be killers so make sure that you
are aware of what you are getting yourself into before you sign up for a credit
card.
2
– Make your payments a day late.
Did
you know that the fastest way to lower your credit score is to make late payments
on your credit accounts? It is extremely important to pay your bills on time. Late payments can be as high as $39.00 and
you would be surprised how quickly they can add up. Come up with a system to ensure that you get your payments out ahead
of time.
3
– Pay only the minimum.
Consumers
often mistake that paying the minimum is acceptable.
For anyone who has never sat down and done the math, here is an example:
a credit card balance of $5,000 at 15 percent APR with a minimum payment of
$100 would take more than 21 years to pay off! That isn’t even the worst of
it that $5,000 just turned into almost $10,000!
Try to send in as much as you can.
4
– Accumulate all the cards you can.
The
more credit cards that you have, the harder it is to keep up with making payments. Department store cards and gas cards are convenient,
but have you looked at the APR’s? It’s
robbery! All you really need is one
or two bank cards such as a Visa or American Express. These types of cards are accepted pretty much
everywhere and offer better APR’s. So
when you get that new credit card offer in the mail, do yourself a favor and
shred it.
5
– Spend today and worry about how to pay for it another time.
The
convenience of having a credit card is being able to purchase things that
you don’t have the cash for. In other
words, being able to buy something that you can’t afford.
Buying now and paying later means trouble if you don’t have the means
to pay it back within your billing cycle.
Be aware of the temptations of credit and ask yourself how long it
will take you to pay off the purchase. To
avoid this kind of impulse buying, remind yourself that you will have to work
X number of weeks to pay for the item. That
may make you think twice about purchasing that diamond bracelet that you just
had to have!
6
– Use credit as an additional source of income.
Don’t
buy a $300 pair of new shoes when you can only afford a pair for $150. Having credit is not the same as having more
income! People often make the mistake
of saying that they have thousands of dollars to spend when in reality they
only have a couple hundred dollars in their wallets. Remember to live within your means.
7
– Share it with a friend.
Keep
in mind that there is probably a reason why this friend of yours doesn’t have
a credit card. I hate to point out
the obvious, but the reason is probably negative.
Do yourself a favor and keep your credit card in your wallet for your
use only.
8
– Use cash advances from one card to pay another.
Believe
it or not, people still do this type of thing.
Please think about this example for a minute: John owes Sally $10.00 so John borrows the $10.00 from Paul to pay
back Sally. John still owes the money,
now instead to someone else! Getting a cash advance to pay another creditor
is extremely foolish. You still owe
the money and then on top of that, you will probably end up paying a cash
advance fee! Lesson learned: use your own cash to pay your creditors, not
someone else’s. If you can’t pay your
debt, this should be a big hint that you are in serious debt trouble and should
look into getting help.
9
– Hide debt from your spouse.
If
you have to hide something, chances are that it is a bad secret. The very act of hiding something says that you have made a mistake
and you are trying to cover up for it. Did
you know that money is one of the top five reasons that couples argue about?
If you are hiding a credit card balance from your significant other, fess
up and discuss how you will handle paying it back.
10
– Ignore your problem.
Having the belief that your debt will go away on its own is unrealistic. The truth is that it will only get worse the longer you put it off. The end result is destroyed credit. Credit counseling companies are available to help you set up a budget and manage your debt. Credit problems do not go away on their own, you need to take control. The next time that bill collector calls you, understand that they are not the ones with the problem, you are!