Credit Card Dos and Don'ts

"I signed up for a free t-shirt and got a credit card!"

Jane, a college freshman, received a free t-shirt when she completed a credit card application at her school. The original limit was $1,000 with an interest rate of 21.9% and a $10 minimum monthly payment. Sounds harmless, right? However, Jane's spending increased as she acquired several more credit cards. She couldn't handle the pressure and was afraid to tell her parents. Her entire life spiraled out of control and, soon, attending college was the last thing on her mind.

Unfortunately, this is a true story and it happens every day in the United States. Don't let it happen to you! Please take time to read the following list of credit card Dos and Don'ts to avoid falling into an enormous amount of debt.

	Dos		Don'ts
•	Stop charging additional purchases. Use only in emergencies.	•	If you can eat, drink, or wear it - don't charge it!
•	Pay balance in full monthly. If this is not possible, try to pay more than the minimum payment due in order to reduce your balance and stop using the credit card until the balance is paid in full. It is a loan which must be repaid.	•	Don't ignore a credit card bill; it won't go away!
•	If your payments begin to fall behind, talk to a school counselor or friend and contact the credit card institution.	•	Don't panic! Go to someone for help!
•	Ask lots of questions (fees, grace days, etc.) and shop around for the best interest rates.	•	Don't fall for gimmicks and don't take the first card offered.
•	Limit the number of cards.	•	Don't get more cards to pay off debts!
•	Watch for limit increases.	•	Don't spend the maximum offered - it all adds up!
•	Ask for low credit limits.	•	Don't accept a card if they will not lower the credit limit.
•	Pay on time. Allow enough mailing time for the payment to reach the financial institution by the due date.	•	Don't pay late - some late fees are as high as $25.

•	To avoid identity fraud, review your monthly statement for accuracy.	•	Don't throw away your receipts until you compare them to your statement. Then shred them.

Improper use of credit cards can negatively affect your credit rating. For additional information, check out these Web sites:

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