Be Smart About Using That Plastic

Online, June 1, 2011 (Newswire.com) - The average household today has more than 16 credit cards, and carries a $9,205 balance, with about 20 percent of those cards maxed out.

Despite all that, no one seems too eager to give up his plastic. But we can all get smarter about how we use it.

1. Make larger payments on your startup loans, personal loans, business loans and credit cards. If you only pay the minimum, you're actually just paying interest. Paying more than the minimum is the quickest way to wipe out your balance.

2. Slice up that plastic. It's fairly obvious that if you hang onto your cards, it's very likely you'll continue to use them. Pay them off and cut them up.

3. If you do apply for a new card, haggle a bit. Most credit card companies will work a little to attract a new customer or to keep one that's been around a while. See if you can negotiate a lower rate.

4. If you get a new card, be sure to read the fine print - all of it. It all matters.

5. Don't use your credit card at the ATM. You could be hit with an up-front fee of 2 to 4 percent, plus interest.

6. When you receive your bill each month, go over it carefully, making sure that each item is correct. If you find a mistake, call immediately and dispute it.

Finally, if your credit card debt is more than 20 percent of your annual income, you need to step back and admit you need help. The best thing you can do for yourself is to contact a credit counselor who can help you devise a plan to pay it off. But be picky about who you work with - many credit counselors are paid by creditors. Be sure you know whose side your counselor is truly on.