My dad has at least eight credit cards in his wallet, with a $0 balance on about six of them. The balance on the other two is around $50 in total. But he tells me that the credit limit for all those cards combined equals around $15,000! So, why he doesn’t use them more often, when clearly he could use the money? His answer: “I don’t want to have to pay all that back.” And that is how credit cards should be used. 

Many people make a mistake by going out and using their credit cards until they reach their credit limit, with no way of paying back. Even if they are able to make the minimum payments on their balance, the finance charges create a situation where the balance never seems to move down, but instead, it seems to move up. And when the balance goes up, the consumer has no hope of being able to get out of debt-period.

Using credit cards wisely, especially in this climate of unpredictability, is a prudent approach to credit establishing. There are three things you can do to avoid getting into more debt, and reestablish your credit without having to pay extra fees to a debt consolidation company. Besides, what they tell you to do (for a fee), you can do on your own with a little planning and a lot of hard work. 

First, to get a handle on your credit card debt, you need first to stop spending money that isn’t yours! Sounds a bit obvious, right? You would be surprised at what a problem this really is. To stop spending money on your credit cards, do whatever what makes your credit card hard to access, such as putting it in ice or locking it away in a safe and hide the key. 

Secondly, pay more than the minimum payments. This will require a lot more work, because if you are barely surviving with your income as it is, paying more than the minimum credit card payment is a huge task. But, there are ways that you can earn more money if you are willing to put in the extra work. If you are proficient at writing, there are several sites where you can write for with little to no experience. The pay may not be as much as you need, but it will help you a little bit. Or you can take on a second part-time job to help creating more income to pay down your credit card debt. Something that will help you.  

Last tip is to only use your card for emergencies. Now, let’s get one thing straight—emergencies are not seeing that perfect little dress on sale or some power tool available for a limited time only. Those are called “temptations”…and should be avoided like the plague. At least, when using a credit card. If you have the extra cash, go for it. Emergencies are something like paying the electricity bill before you are disconnected, or getting caught up on a rent or mortgage payment before you are kicked out of your home. These are emergencies to save your credit cards for. When it comes time to pay off the debt, you must pay more than the minimum payment to avoid as many finance charges.

If you work at these three steps to reestablish your credit rating, and then only use as much of the credit card limit as you can reasonably pay off quickly, then you will be using your credit card wisely—just like my dad.