Almost everyone has access to credit these days. Teenagers and adults use credit cards, lines of credits, vehicle leases, loans and mortgages. They may be different in how they work but at the end of the day, it’s borrowed money. There are various associated fees including:

• Interest
• Cardholder fees
• Legal fees
• Transactions fees
• Currency exchange fees

Credit has its uses and benefits and can include less cash to carry around, global access to cash and the ability to buy things before you pay for them. That’s the key. If you don’t have the money to pay for it today or when the bill arrives, you will be charged fees and interest – that’s how the credit companies make their money.

It’s so easy to pay by credit but the balances can mount up if you don’t pay them in full each month. If you start to slide down this slippery slope you may find yourself quickly at a point when paying even the minimum monthly amount is onerous and that’s when your financial state can crumble.

Here are some tips to managing credit:

• Whatever you borrow, make sure you can afford the payments – do your own math.
• Bank with a reputable bank. If you must borrow, they assess your financial ability to repay using reasonable standards and typically don’t lend more than you can afford.
• Avoid using a credit card or line of credit to pay for things you can’t afford now.
• Pay off any balance in full each month.
• If you do have a balance on a credit card or line of credit, make sure that you make at LEAST the minimum payment and pay it ON TIME. This is how they measure you as keeping your account in good standing.
• Use 1 card and keep 1 in reserve.

If you have many outstanding debts it can be easier to tackle 1 at a time. Continue to make the minimum payments on all your cards and loans but choose the highest rate debt to make extra payments against.
If you’re still struggling….put the cards away and work with cash!