Avoid Common Credit Card Pitfalls

The biggest mistake people make with their credit cards is overusing them - easy to do whether you have one card or a whole wallet full of them. You can avoid a credit crunch by following certain guidelines you set for yourself. For example, you may decide to have only one card with a very manageable limit so that you can't overspend. Or you might decide to use your card only for emergencies or things you can't pay for in cash (an airline ticket bought by phone, a tow for your broken-down car, an auto rental, or an online purchase, for example).

The biggest mistake people make with their credit cards is overusing them.Think twice before accepting retail store cards. Though they often come with a tempting merchandise discount, they also tend to charge higher interest rates than the kinds of credit cards that can be used anywhere. Why add another card to your wallet, especially one that has limited usefulness? Not only does it tempt you to spend, it also makes you that much more vulnerable to credit card fraud.

Also, unless you pay off your credit card balance every month without fail, avoid using plastic for everyday purchases like food, toiletries, lunch and snacks. It can become a habit, and small charges tend to add up quickly. Use cash for smaller daily purchases. If you don't have the cash for an impulse buy, put the decision off for a day and ask yourself if you really need the item. Remember, the single most important component of wise credit use is controlling your spending.