Credit cards along with other loans will help you pay for needed items, but if you use them irresponsibly, you can get into significant financial trouble. Educate yourself on the basics of responsible credit card as well as loan use so you don’t get into a cycle of debt that you simply can’t break out of.
You need to limit your charge card use for a couple of reasons. If you are using too much credit, you will not have much available when you need it in an emergency. Additionally, using an excessive amount of credit means that you need to pay a bigger bill at the end of the month or pay larger finance charges if you don’t pay your credit card balance off entirely. Finally, maxing out your credit cards affects your credit rating.
To avoid these issues, you need to limit yourself to 30 percent of your credit card limit for every card. For instance, when you have credit cards with a limit of $1,000, do not charge more than $300 in purchases each month, and also pay the card off in full at the end of the month.
Some credit card companies allow you to get cash advances with your credit card at an ATM machine or at the bank. It may be tempting to do this because you can get the cash in hand immediately. However, you need to stay away from your credit card for cash advances. Credit card companies charge high rates of interest on cash advances, and you’ll end up paying for that cash for months and months. If you’re having a financial crisis, make arrangements with your lenders or pay for purchases using the credit card itself rather than getting cash advances.
Getting a payday loan is never a good idea, and you need to not get one. They work similar to a cash advance, and you are not borrowing from your available credit, you’re borrowing against your next paycheck.
Payday loans normally have a much higher interest rate; they aren’t like a loan that you will get from a bank. You will have to pay that loan with interest from your next check and that will most likely leave you short of cash once again. Then you will get a another loan, and this becomes a circle that you can’t get free from.
If you have to obtain a payday loan because you don’t have any credit left, you need to attempt to repay your credit card debts to ensure that this is not something you need to do. The more of your credit cards that you pay off the greater your credit is going to get. Not only will your credit increase but you can once again have credit available to you. If the cards are to the point that you cannot pay them in full at the end of the month you have to stop using them until you get them caught up. You should pay as much as you can each month. If you can make an extra payment in the middle of the month that will help you a lot.
Not many people will make it without using credit at some point in their life. However it is important that you use it responsibly, when credit is used in the correct way it can make life much simpler.
How To Use Credit Responsibly 