Credit Check

For many people trying to reduce or eliminate debt, a credit card can seem like a mortal enemy. If you know you can’t use one responsibly, then you’re right to take the advice of experts who say that the best debt is no credit card debt. If you are able to get your debt under control and want to keep a line of credit open so that you have an active credit history, make sure you keep an eye on your credit report. Here are some things to look out for:

• Check your statement each month. Whether it comes online or in the mail, be certain that you’ve only been charged for purchases you have made, and that all refunds have been issued appropriately.

• Review your rate. Credit card companies often raise the APR (annual percentage rate) without telling you. Make sure you keep an eye on all fees associated with your account, and when in doubt, ask for a reduction!
• Use credit wisely. You already know how to get in trouble by overspending. Before you whip out that card for a latte or a “must-have” pair of shoes, ask yourself whether you could afford to pay for it in cash. If the answer is no, the purchase may not be worth it.
• Keep a low balance. The less available credit you use, the higher your credit score. Aim to use less than half of what your limit is—it will make it easier to pay your bill in full each month and keep your credit report healthy.

By learning to use credit to your advantage, you can keep yourself virtually debt-free! [Kiplingers]