Career Article 139:
Financial Basics: Credit Cards

By Tamara Dowling, CPRW

Credit cards can be a very convenient way to make and track purchases. A good credit history can help when you need to make large purchases or apply for a loan. Of course bad history can prevent you from these things. Take a look at the fundamentals of credit card management.

1. Shop carefully for a credit card. Compare interest rates, annual fees, penalty fees, fraud policy, online service, and purchase insurance.
2. When applying, be consistent with the name you use. (i.e., Roger J. Johnson) Check twice to be sure all information is accurate.
3. When you get your card and member agreement, read the agreement carefully.
4. Make your payment on time. Allow 6 days for mail time. Write your account number on the check on the memo line.
5. Pay at least the minimum. Try to pay the entire balance - or as close to it as you can manage.
6. Notify your credit card company when you move. Look out for your statement. It is your responsibility to make payment even if the bill is delayed by the mail service.
7. At least once a year, check your credit reports with the three large credit bureaus.
   Trans Union 800-888-4213
   Experion 888-397-3742
   Equifax 800-997-2493
   You may also check your credit through one of many online services. Be aware of exactly what service you are buying and any ongoing commitments or fees. Some companies offer a free credit report with the purchase of a monthly credit monitoring service.
8. Your total debt should not exceed 20% of your net income. This includes all debt excluding rent and mortgage.
9. Don't spend up to your credit limit. Save some of your credit for emergencies.
10. Interest computation may be charged by the day or month. If you carry a balance to the next month, new purchases can begin to accrue interest immediately...another reason to pay your balance in full each month.

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