Credit Cards-Friend or Foe?

This is the fifth of seven installments to accumulate wealth.

You must be careful accumulating credit cards. If you are disciplined to have a credit card that you will use for your monthly needs and pay it off every month, then you should acquire a credit card that will offer, "cash back" at the end of the year or travel miles. It is also advisable to have a credit card that you keep a small balance (operative word is small) on each month. As you pay on time each month it will demonstrate that you can manage your debt. It is also my opinion that you should acquire a few extra credit cards for emergency use only. The plasma television or the new Xbox is not an emergency. Needing your appendix removed is an emergency. If you have a medical insurance plan that requires a high deductible you should definitely acquire a few credit cards for this emergency. Once you receive the credit cards place them in your safety deposit box at your bank. The cards will be out of sight and out of mind!

When the credit cards are close by people have a tendency to use them. Their debt grows higher. But some don't worry about their debt because they receive offers in the mail, which will consolidate their debt. One must be careful of the consolidation game. I recently received a promotion to consolidate my credit cards. On my initial review it looked great. I would not have to pay interest for the next year. It would save me a lot of money. But after my 2nd review of the promotional material I learned that if I were late paying this specific credit card or any other credit card (that's right, I said any other credit card) my interest would begin immediately and at 21%. The lesson learned is to read the fine print.

We are told that we need debt and we need to build a good credit history. With a good credit history and a good credit score we will get the best interest rates when purchasing a house or vehicle. But to build credit it's expected that we get into debt. That way we can demonstrate to future creditors that we have a history of managing and paying debt. Did you know if you spend money on credit cards every month and pay the bill off by the due date it doesn't necessarily mean you have great credit?

Check out your credit score on www.myfico.com. FICO stands for Fair Isaac ... Company. This is the company that creates your score. At this site you will be able to learn more about establishing and managing your credit.

If you are just starting to build your credit, the easiest way is to deal with your local bank. Your bank can help you get a secured credit card. A secured credit card is a card that has a credit line equal to the amount of money you have on deposit with the card company.

It's important to establish a good credit history. Use your credit cards wisely and always have a stash away a few credit cards for real emergencies.

Here is a life filled with Health, Wealth ... Happiness.

Michael Kaye www.frompaintopersonalgain.com

Dr. Michael J. Kaye has been a practicing Chiropractor over the last 18 years. He holds a post-graduate degree in Rehabilitation. His practice focuses on treatment for the chronic and post-surgical patient. He has published articles on post-surgical knee rehabilitation; and chronic myofascial pain syndrome. He has developed a web site www.frompaintopersonalgain.com devoted to health, wealth and happiness. His coaching site is www.coachinggps.com Contact the author, Michael Kaye , at mijokye@comcast.net