| Credit cards are now fast becoming the best way to | | | | credit card. They then use the allocated amount each |
| pay. Although some merchants and establishments | | | | month as the benchmark, or the maximum that they |
| have yet to install credit card machines in their stores, | | | | can spend using the credit card. |
| a good majority of department stores and major | | | | 3. Are you applying for a credit card because you |
| outlets take plastic. There are several advantages | | | | want to spend conveniently, or because you are after |
| associated with carrying credit cards. You can make | | | | incentives associated with the card? Some credit |
| emergency purchases easily, as you do not have to | | | | cards offer incentives such as gift certificates, cash |
| look for a working ATM if you suddenly run out of | | | | back guarantees on about one percent of total |
| cash at the last minute. You do not need to carry large | | | | purchases, and point awarding systems that can |
| amounts of cash in your wallet, which can be | | | | translate into frequent flier miles. You may be forced |
| dangerous if you are traveling abroad and do not have | | | | into spending more using your credit card only to get |
| means to access your bank account. | | | | these rewards. You may save more by saving money |
| A credit card, however, will also have its | | | | instead of using your credit card. |
| disadvantages. It can encourage rather than | | | | 4. For how long do you intend to hold the credit card? |
| discourage spending, as it offers the illusion that no | | | | Many credit card companies charge high annual fees |
| money is being spent at all. Although you are not | | | | after the first year of use, and these fees can make a |
| obligated to pay the full amount that you owe the | | | | dent on your savings. Be sure that you have enough |
| credit card company, what money you have yet to | | | | savings to pay, and that you are earning enough |
| pay will be slapped with a high interest rate, further | | | | money to replace any losses you may incur due to |
| increasing your debts in the next billing cycle. | | | | spending using your credit card. |
| If you want to apply for a credit card and enjoy its | | | | 5. How do you intend to pay for your credit card bills? |
| advantages, take note of the following tips before you | | | | Some credit card companies can arrange for an |
| consider any credit card offers. | | | | automatic debit from your savings account, although |
| 1. Study your spending habits. If you can, have a copy | | | | this can be inconvenient if you suddenly discover that |
| of your bank account printed out. Do you spend more | | | | purchases that you did not make are being credited to |
| than you earn? If you appear to be living beyond your | | | | your account. The paperwork to return your money to |
| means on a cash basis, then you may milk your | | | | you can be complicated. Moreover, credit card theft of |
| pockets dry if you have a credit card. | | | | less than five thousand dollars is usually not |
| 2. Take a good look at your bank account and your | | | | investigated, so you have to be prepared to take a lot |
| total savings. Can you pay your credit card bills when | | | | of financial risks. |
| the time comes to pay, and in full, at that? A common | | | | Although they seem to be fraught with disadvantages, |
| practice used by wise spenders is to look at | | | | credit cards can actually help you manage your |
| ninety-percent of one's savings, and then divide that | | | | finances better. As long as you know how to spend |
| amount by twelve, corresponding to the twelve | | | | wisely and not abuse your credit cards, you can enjoy |
| months in the one year that you will be holding the | | | | the advantages that they can offer. |