Credit cards are a true godsend as they provide a safe and effective way to make purchases when one does not wish to carry large sums of money around. Additionally, they provide an effective means of accessing financial resources during an emergency when actual capital might be limited. Yes, credit cards do offer a great number of benefits, but these benefits will be completely turned on their head when a credit card is not used intelligently. If a credit card is used foolishly or irresponsibly, then the results may prove to be downright disastrous. That is to say, if one is buried under a massive mountain of debt, whatever benefits the cards previously possessed will be undermined. As such, it is critical to use a credit card intelligently and here are a few simple guidelines to help you in that regard.

First, what must be understood that “using a credit card” start not with the very first time you make a credit card purchase, but with the actual application process. That is to say, it is critical to select the right card before even attempting to use it. For example, American Express requires that its entire balance be paid off in full every month. If you are unable to do this, then you should not be using an American express card as the potential to ruin your credit from missed payments becomes extremely likely. As such, select the right card that fits your needs off the bat.

This brings us to our next point – select a card that is low in interest. If you are using a card that has a very high interest rate, you are simply not using your card intelligently. If you accept a card with a 19% interest rate when you could have had a card at a 12% interest rate, then you have simply made life much more difficult for yourself as you will be amassing a significant amount of interest payments that could have been completely avoided.

This brings about the next point which is one that most people overlook: credit cards are not gifts; they are loans. When you use a credit card to make a purchase, you have to pay the loan back. Yes, this may seem like a very simple notion, but many, many people do not even think of it! As such, they overspend and overcharge with their card and this can lead to a massive amount of debt in a very short period of time. Often, the debts that are accrued are debts based on needless leisure purchases. This type of reckless spending is probably the most unintelligent manner in which to use a credit card. Of course, everyone needs to spend an entertainment dollar here and there and this is understandable. However, when one is reckless with this type of spending the results can be cataclysmic. So, it is best to stick within a reasonable budget for entertainment purchases and not allow fiscal irresponsibility to cause financial Armageddon.

Here is also another tip that can keep costs low: pay cash whenever possible. That is to say, do not get into the habit of always pulling out the credit card and using it to make purchases when cash is available. This is a surefire way of amassing needless debts so do not get into this habit!

Ultimately, the most intelligent way to use a credit card is to use it with common sense and proper financial decision making. If you follow some basic, simple guidelines of financial responsibility then such credit card errors and problems will be avoided. Credit cards are a good thing to have; don’t turn them into something bad!