Is It Possible to Use a Credit Card Responsibly? | Cleveland Bradley County Teachers Federal Credit Union

You have likely heard plenty of unsavory statistics about the dangers of credit card debt. Over half of all credit cards in America carry a balance on them, and with some interest rates reaching as high as 19%, this can add up to a significant amount of money being spent on interest every month.

However, it can’t be denied that credit cards have a lot of perks, too—from cash back offerings to travel points to exclusive offerings, being a credit card holder does have some benefits. So, what makes credit card spending so susceptible to racking up debt, and how can you go about responsibly using a credit card?

Why Credit Card Debt Is So Common

As mentioned, credit cards tend to carry quite high interest rates on any balance that is not paid off by the due date. The interest accrued is then added to the current balance, leading to a compounding cycle of debt and interest piling up.

This, combined with the delayed nature of credit card payments (i.e. paying for purchases at least a month after they are made, in most cases), can lead to debt accruing rapidly.

Tips for Responsible Credit Card Use

Pay your balance off in full each month. While credit cards typically have high interest rates outside of promotional periods, if you pay off your balance in full each month, you will not carry a balance on the card and thus will not accrue interest from month to month. The key to this is to avoid overspending on the credit card, so you will be certain you can pay off its balance.

Take advantage of cash back offers. One of the main benefits of the credit cards on the market today are their cash back offers and rewards perks. If you take advantage of these and couple them responsible credit card use, you can actually make money or save significantly each year by using your credit card.

Understand your limits. While there are perks to responsible credit card usage, there is no need to get a credit card if you do not feel comfortable with it. Giving yourself a good money management foundation is important before delving into the world of credit cards, and it is better to be cautionary than to accrue debt.

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