WASHINGTON (9/3/13)--As parents pay off credit card charges from summer vacations and school shopping, their college-aged children are receiving offers for cards of their own (National Foundation for Credit Counseling
While credit is a terrific money management tool, using it carelessly can affect your ability to get a job, lease an apartment, or buy a vehicle. Follow this advice from the NFCC for using credit cards:
Choose a low-rate, low-fee card. Make your credit union the first stop. Credit union credit cards typically have lower rates and fees than other financial institutions. If you're not already a credit union member, visit asmarterchoice.org to locate a credit union in your area.
Don't charge daily living expenses. Refrain from using a credit card for daily living expenses such as groceries and gas. Consider using a debit card or cash instead, and monitor your account balance online to keep spending on track.
Don't charge more than you can pay for when the bill arrives. Think twice about charging a vacation, a new wardrobe, or other items that won't be worth the debt if you can't pay for the items when the bill arrives. Instead, set up a special savings account for future purchases at your credit union.
Don't let anyone else use your card. If you allow a family member or best friend to borrow your card, it's still your responsibility to make payments and pay off the debt.
Protect your card. Identity theft often is committed by people the victim knows. Keep your credit card in a purse or wallet instead of lying around your apartment for all eyes to see.
Get a secured credit card to help build or rebuild credit. "If you've dinged up your credit record with careless habits, it's hard to qualify for credit," says Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association, Madison, Wis. "A secured credit card trades access to credit for your commitment to keep a certain amount of money in a savings account. Once you've made, say, 12 months or so of on-time credit card payments, you'll have developed or redeemed your credit record and be eligible to apply for a conventional credit card."
For more information about credit cards, read "Secured Cards Help Establish Creditworthiness" in the Home & Family Finance Resource Center