« Student Loans, College Enrollment - Is it worth the risk? | Main | How Your Interest Charge Is Calculated »
August 26, 2006
When NOT to Use Your Credit Card
There are legitimate reasons to use your credit card such as:
I could go into every possible purchase but there is no need to go into that depth for what I want to say to you here.
Using your credit card to earn rewards points is a wonderful thing but make sure you don't over-extend yourself. Earn your points, pay your balance in full. That is a good use of a credit card.
When NOT to use the plastic
Never use your credit card for cash advances!
If you need to make a purchase you are much better off making the purchase of an item on your credit card as purchases in most instances have a grace period before interest begins to accrue.
A cash advance will immediately begin to accrue interest. Check your rates, as you will find the cost of borrowing on your credit card is incredibly high! Avoid pulling money from an ATM on your card, it's going to hurt! Same goes for those Visa and MasterCard checks that are exactly the same thing as a cash advance on your credit card. Credit card checks are simply a sneaky way that the banks have come up with to encourage you to take out a high interest cash advance.
If you truly do need to borrow money in the form of hard cash you should apply for a personal loan at a much lower rate than a charge card. Yes, it will take a little longer to receive the cash but this simple piece of advice will save you a lot of hardship down the road.
Cash advances on credit cards are a fools game - Don't play a game that is going to leave you facing the potential of bankruptcy!
Trackback Pings
TrackBack URL for this entry:
http://www.crediteria.com/cgi-bin/mt/mt-t.cgi/114