“The prudent sees the evil and hides himself, but the naïve go on, and are punished for it” (Proverbs 22:3). Credit and credit cards do not cause financial problems. It is the abuse and misuse of credit and credit cards that create financial problems. However, through discipline consumers can enjoy the convenience of credit cards without falling into the debt trap so often associated with the use of credit cards. The following are suggestions on how you can use credit cards for your benefit and convenience and yet not allow them to control you.

Credit card applications
If you are not interested in an unsolicited or pre-approved credit application you received in the mail, don’t throw it in the trash. A thief who finds it can take out an account in your name and begin charging. Always destroy the application by cutting it into pieces and disposing of the pieces in three or four different waste receptacles. Another option is to mark through the application adn mail it back to the sender in the post-paid envelope that came with the offer. You can note on the application that you wish to be removed from their mailing list.

If you want to stop the other offers from being mailed to you write to Equifax Options, PO Box 740123, Atlanta GA 30374-0123. Along with a request to remove your name from credit application mailing lists, include your name, full mailing address, Social Security number, and signature. Equifax is one of the three major credit reporting agencies. They will remove your name from the list they provide and will forward your request to the other two agencies: Experian and TransUnion.

Using credit cards
The following suggestions will help you control the use of credit cards.

Ask your bank for an extra checkbook register (they generally provide these free) to keep track of credit card purchases and payments. Do this the same way that you record checking account transactions.

Never use credit cards for anything except budgeted purchases.

Always keep in mind that just because you might be able to afford something does not mean you have to buy it.

Carry a credit card with you only if you carry a $0 or near $0 balance. If you have a credit card balance, keep the credit cards in a safe inconvenient place that is out of sight; do not carry them with you.

Retain only one all-purpose, no-fee credit card. Cancel all others. Accept a credit limit that you can easily pay in full on your present income, and reject all credit limit increases.

If stores add a surcharge to your bill for paying with a credit card, you can refuse to pay it. Most credit card companies do not allow vendors to add a surcharge to credit card purchases.

Paying the bill
Credit card interest is a waste of money. Pay your bill off every month during the grace period. By paying off your credit card balance monthly you will never have to pay interest charges. On the same day that you made a charge on your credit card, deduct the charge from the appropriate budget category. You spent the money, so it is no longer money that is available to spend. As soon as the statement comes in, mail the full payment immediately. If your credit card company charges you a fee for not carrying a balance, cancel the card.

If you can’t pay
The very first month you have a credit card bill that you cannot pay in full, destroy the credit card, never use it again, do not get another one, and try to pay the balance off as soon as possible. Make the payments as early in the billing month as you can or make two smaller payments a month if you can’t pay early. Most banks calculate interest on the average daily balance. The larger the payment and the sooner in the month you make it, the more of it will apply to the principal.

After balance is paid
If you feel you must have a credit card, try using a debit card. A debit card works like a check: it debits your checking account the amount you charged. If you need a credit card in order to confirm hotel and car rental reservations and they will not accept a debit card, make sure you store the card in an inconvenient and difficult-to-access place where you will not be tempted to use it for other things. Some financial counselors recommend freezing the credit card in a block of ice and keeping the account number and the customer service telephone number in a safe place if you need to confirm a reservation.

Conclusion
The best way to avoid financial problems is to avoid the traps that cause financial problems. The primary cause of financial problems for most families is the misuse and abuse of credit cards. If families can function without credit cards, it is to their advantage. If they feel that they need a credit card, disciplined use and paying off the balance monthly will ensure that the credit card privilege will not be abused.