Thoughts on Credit Cards

Credit Cards have their place and can be useful when used correctly, such as when I was traveling in another state and needed some quasi-expensive repair work done on my car. Not having enough cash on hand to have the car fixed, it was definitely an advantage to possess and be able to use a credit card. However, excessive use can result in finding oneself with more debt than is considered desirable. Here are some thoughts on using credit cards:

• Responsible use of a credit card can help develop your credit score.
• Plan to use them sparingly. Indiscriminate use can result in the balances growing more quickly than you realize until you receive your monthly statement.
• If possible, pay off the balance monthly. If you cannot, pay more than the minimum amount.
• Pay in a timely manner in order to avoid late fees. In addition to late fees, you may find your interest rate has increased dramatically, in some cases ending up as high as 28% APR.
• Read the small print. Find out what your penalty fees are and what the highest interest rate will be. Also, find out if that interest rate is an introductory rate and what the normal APR will be after the introductory period is over.
• Be aware that some cards have annual fees.
• Don’t apply for every credit card that is offered to you.
• In the case of a Rewards card, find out what the expiration schedule is.
• Some cards, such as the UKFCU Visa Platinum card offer the option of designing your own card graphic.

Using a credit card also offers certain security advantages over using a debit card or cash for your purchases.
By the way, in addition to low rates and the option to create your own card, UKFCU’s Platinum Card offers a year-end annual summary of charges, which can be used in preparation of your taxes and as a potential budgeting tool. Click here to apply or learn more about the UKFCU Platinum Visa card.

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