It's so easy to fund your lifestyle with a credit card. But paying it off is a whole lot harder.
So when you are thinking of applying for a credit card, you should ask yourself some tough questions and answer them as honestly as you can.
Have you had problems with overspending in the past? Can you trust yourself not to let it happen again? Can you really trust yourself with a credit card?
If the answer to one or all of those questions is 'no', then tear up that application form.
If you are sure you can trust yourself with a credit card and can use it responsibly then you should still keep yourself on track by following a few basic rules.
And rule number one is: choose your card carefully. There are 1,000s of cards to choose from and sometimes the most prominent cards aren't the best value, so look further than the big banks.
Search the internet and find the most competitive cards with the help of one of the many websites offering comparisons.
When you've made the right choice and got your card, carry on making the right choices � like paying off the balance every month. That way you know you're not spending more than you can afford and you won't have to worry about excessive interest.
Beware of simply paying the minimum amount � once the interest has been added on you will hardly make a dent in your debt this way. And the cardinal sin is missing payments altogether because then you will give the card company an excuse to add charges to your debt.
Of course, it might not always be possible to pay off the balance every month, so you really have to keep an eye on the interest rate you are paying.
Here's a little tip: get a credit card with an introductory 0% interest rate � there are plenty on offer. Now, the 0% interest rate will only apply for a limited period but when that runs out, you can just transfer your balance to another card offering the same deal. You can carry on doing this and never pay interest.
If this solution is too high-maintenance for you, it is still a good idea to check the market regularly to see if switching cards will save you interest charges.
As far as store cards go, the advice is simple: don't. The interest charges on these are usually astronomical compared to regular credit cards. If you surrender to the temptation of their gift or discount incentives, make sure you pay off whatever you spend every month or you will be stung by the interest.
If you do get into trouble with your debt, make sure you talk to the credit card company and let them know. This can save you extra charges and the card company will be eager to work out a payment plan with you � they want their money back without having to take you to court.
Getting the help of a professional debt counsellor is advisable because they can use their experience to work for you and maybe even get interest frozen.
Make sure your credit card history doesn't read like a sob story.