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April 22, 2006
Using Credit Cards Wisely
Credit cards are a great way to begin establishing a credit rating. If you find you are a nonentity in the world of credit, get yourself a credit card, start charging, and pay off your balance every month. After about six months, see if you can get your limit raised. Remember, though, not paying off your balance on time will cost you significantly in interest. Failing to make even the minimum monthly payment will cost you on your credit rating.
Credit cards are extremely convenient. They're safer than carrying scads of cash, and they are easier to use than personal cheques. If you pay them off on time, they can be even cheaper than using cheques. There's no question that cards have a place in your credit closet, but you have to be disciplined in managing them, or they can turn ugly.
Choose your credit cards carefully. Some charge higher interest than others. Store cards are notorious for charging the highest interest. Besides which, what do you need a store card for if you have a financial institution's card? It's just a temptation to spend more than you have. And it's hard to keep track when you have zillions of credit cards at your disposal. Get rid of them. Keep only those you can manage effectively.
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