Credit cards can be disastrous, and the credit card companies are becoming even more sneaky when it comes to interest and fees. Here are some quick tips to watch out for when dealing with these financial monsters:

  1. “Fixed” Interest isn’t always fixed.
    Often, credit cards have clauses in the terms and conditions that will allow them to jack up your rate in the event of default, or even based on continual credit reviews they perform on you. That means if you have a 30 or 60 day late payment on a different line of credit, your credit card may jack the interest rate on you, even if you have been perfect in your payments with them.
  2. Don’t go over your credit limit.
    An over-limit fee of $20, $25, or more is assessed for going over your credit card’s limit. This may not be a one time fee either. They may charge this fee each and every month you remain over your credit limit. Most credit card companies have a way for you to review your account online, use this service, and keep a close eye on what you are spending.
  3. Make timely payments.
    I can’t stress this point enough. You cannot be late with your credit card company. You must make your payments, and establish good credit. All it takes is a couple of late payments to really put a bite in your credit, and then when you want to go buy that house, you can’t.

I have said it before and will say it again, credit cards are a good way to build up credit when you have none. However, they are very dangerous, because you get the euphoric feeling that you can get whatever you want because you have a piece of plastic to buy it with. Be smart, use your card as a credit building tool, not a license to shop.

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