Why throw your credit cards? Use them and make them work for you. Read here how.

by Debbie Brown
(United Kingdom)

If money is a sweet sensation, credit cards emphasize this adage. No matter where you are and what you do, a credit card is always an easy-to-use financial accessory. Almost every second person possesses a credit card. But as the human nature is governed by temptations, people can hardly resist their adrenaline rush when they shop or are purchasing online. But did you know credit cards could be actually useful to manage your money? Sounding strange? But it is not so.

A credit card can be like a lifeboat when you are in a sea of trouble. But people usually give up upon credit cards when they run into credit card debts or are facing very high interest charges. If you have a number of credit cards and there are no debts or any other issues on your cards, do not dispose of them. This will certainly affect your credit rating and will give a positive impression to lenders when you go ahead to borrow again. Usually lenders check your account balance as well as your arrears and compare it to your available balance. Keep your debts at a safe 30% below your current credit. So if you are the one who has a credit with no arrears and you shut down that line of credit, then that credit is no longer considered into your debt vs credit ratio. Since we miss our payments on our credit cards and we get into debts. This is a common phenomenon everywhere. Whether a UK debt management plan or a US debt management plan, it is an ultimate debt solution. But there is a way to sort your finances rather than a debt management or a debt consolidation. If you have forgotten to make payments on your credit cards since the last three years, then have patience and wait till this missed payment gets chucked out from your credit report. Do not cancel your credit card prior to this. Make sure you check your credit report regularly. This is a way to improve your credit report. If you would have canceled your card with a missed payment record, it would show in your credit report. This kind of credit report usually becomes an obstacle while you apply for a loan or a mortgage.

There are a number of credit cards that come with an excellent cash-back facility and you can earn every time you swipe your card. The American Express Platinum MoneyBack Credit Card offers 5% cash-back for the first three months. At times a 0% credit card also comes very useful for paying off debts. This card does not charge any interest for a particular interest-free period such as one year or so. You can opt for 0% credit cards if you are stuck up with very high interest or want to payoff debts early. For instance, the HSBC Credit Card offers 15 months at 0% with a fee of 2.9%.

Every thing has a good and a bad side. So it is important that you judge things positively. For credit cards too, you must think and spend and not spend to think! Make sure you get the best deal and check your credit history regularly to make your payments on time.