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Avoiding Credit Card Missteps

Read tips for preventing financial disasters using credit cards.

Limit yourself to one card. Having more than one card tempts you to overspend.

Pay your bills on time. Avoid late fees, a penalty-rate annual percentage rate (APR) and the threat of a poor credit rating.

Pay your credit card balance in full each month. If you can't pay your credit card bill fully each month, always make more than the minimum monthly payment.

Never use one credit card to pay another. If you only have one card, you won't be put in this dilemma. But if you do have multiple cards, this is a cardinal rule. Use savings, responsibly borrow from family or friends, or talk to your credit card issuer and ask for help.

Differentiate between wants and needs. The convenience of plastic makes it easy to overspend.

Avoid exceeding your credit card limit. You can face over-limit fees or risk having your low APR replaced by a higher rate.

Avoid cash advances. Except in the most dire emergency, do not request cash advances. They are usually expensive.

Use student loans, not a credit card, for tuition. Student loans are far more cost effective for tuition.

Don't skip payments, even if your credit card issuer says you can. You will be charged full interest during this period and will end up owing more the following month.

Source: Center for Student Credit Card Education

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