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Proper credit card use increases well being

Utah State University Extension

Learning to use credit cards in a positive manner increases financial well-being, personal resources and improves asset management.

Treating credit card transactions as if they are check, cash or debit card purchases can help you track and regulate spending.

Credit cards are safer than debit cards or checks and are needed to establish a credit history and credit score.

They are necessary for such things as car rentals and hotel reservations.

If unauthorized purchases are made, credit card charges can be disputed.

Many credit card companies offer pseudo numbers for safer online shopping.

There are also travel and currency exchange benefits from credit cards. Many credit cards come with added benefits such as extended warranties, lost baggage insurance, car rental insurance and discounts at partner merchants.

The most obvious problem with credit cards is making the payments.

Three out of five households don't pay off balances at the end of the month.

The credit card revolvers essentially pay for credit card holders who do pay off balances each month.

Credit card companies now make more money from credit cards than from home loans.

Carbon County residents should consider the following tips to use credit cards wisely and become a master of the plastic.

•Beware of high interest rates.

Most credit card companies have dropped interest rates only slightly.

The average interest rate in 1999 was 19 percent. That has fallen to about 15 percent.

•Watch penalty fees. Many carry $25 to $35 late fees and over-the-limit fees.

•Make payments on time.

•Shop around for a card that doesn't have annual fees.

•Know credit card terms and conditions.

Read the small print. What the large print giveth, the small print often taketh away.

•Shop around for a card that matches personal spending habits.

People might save 5 percent on a reward, but pay 17 percent on interest.

Interest rates are often higher on reward cards.

•Negotiate lower interest rates.

Lower rates usually mean fewer benefits such as rewards or interest-free programs.

•Retain all records of purchases and returns and reconcile statements every month.

•Never spend more than the household makes.

Don't put more on cards than can be paid at the end of the month.

Wait 24 hours before purchasing the items.

•After paying off balances, people can enjoy the credit card rewards. But they should select rewards that match their goals.

Examples include travel rewards, savings accounts, gift cards, college funds, extra cash and rewards paid on a mortgage balance.

Consumers should know all credit card terms and conditions.

Tracking rewards is fine. But local residents should remember that rewards never offset the cost of an unpaid balance.

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