Living in the net

You’ve got a credit card and you’ve learned how to manage it. Now we’ll show you some ways to protect your good credit.

The topics covered in this chapter may seem wide-ranging, but they all have a common theme: wise and safe use of your credit card. Tempted to buy online? Here’s why you want to use a card to make your purchases. Find a mistake on your bill? We’ll show you how to dispute it. Want a free trip to Hawaii? Maybe a credit card with travel perks is the way to go. Can’t get credit? A secured card might get you going. Too many bills due the first of the month? You can change your due date.

To use credit intelligently, start by examining the terms of the card(s) you are currently using. Keeping track of your cards, their rates, and your current balances will help you to be aware of how you use credit cards. Increased competition in recent years has led some credit card companies to offer enticing features to attract new cardholders, including no annual fees and low interest rates for an introductory period. (And credit card companies sometimes will give their introductory rates to existing cardholders so that they won’t transfer their balances to another credit card company.)

Helpful Hints for Credit Card Use:
Try to restrict your credit card use to only one or two cards.
Use credit wisely. Ask yourself the following questions before purchasing with credit: Is this something I need? Do I need it now? Do I have the ability to repay? How long will it take me to repay? How much will it ultimately cost me?
Make sure that monthly debt payments do not exceed 20 percent of your monthly net income.
Shop around for credit cards with low interest rates, low annual fees and reasonable grace periods before finance charges begin.
Pay the entire balance when it’s due and review your spending habits to cut unnecessary purchases.
Pay your bill as soon as you get it, and if you can’t pay the entire balance, pay more than the minimum amount due when possible.
When you use credit to pay for an item, write down the amount and subtract it from your funds to ensure you can pay the amount at the end of the month.
Never lend credit cards to friends or leave cards or receipts lying around where people can find them.
Think ahead. Be proactive, not reactive, about your finances. Plan for different obligations now and after graduation.
Keep a list of your credit card account numbers and phone numbers in a safe place in case a card is lost or stolen. If a card is lost or stolen, report it as soon as you notice it is missing.

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