Credit Card Problems
How to Avoid Credit Card Problems
Credit card problems can be avoided by sticking to good habits--pay cash if at all possible, pay off the balance every month, and pay on time. Many people develop credit card problems because they live beyond their means. If you don't have the cash to pay for that DVD player, don't buy it.
Credit is borrowed money--borrowed from a company that will charge you fees and interest for its use. If you write a check or use your debit card, you are thinking smart about spending money. Even though you aren't handing over cash for that item, a check or debit from your checking account will at least keep you aware of how you are managing your finances.
There are common warning signs that indicate to a company doing a credit check with the credit bureaus that a person may be developing credit card problems. Having too many credit cards is a red flag. Maintaining high balances on cards is another.
Usually, creditors like to see balances way below 75% of the credit card limit. They also prefer to see minimal activity on a card. Occasional charges signal a responsible card user to potential creditors.