University of Illinois Extension

10 Tips for Using Credit Wisely

FOR IMMEDIATE RELEASE
April 7, 2009

It's oh, so easy, to use your credit card, but if you're not sure it can pay the bill in full when it comes, you're probably only buying trouble, said a University of Illinois Extension consumer and family economics educator.

"Using credit to pay bills often brings only temporary relief, and it can be more expensive in the long run. As a rule, the more a family borrows, the unhappier they are with their financial situation," said Evelyn Prasse.

"Here are 10 tips for using credit wisely," she said.

  1. Know how much credit debt you can handle. It shouldn't be more than 15% of your monthly take-home pay.
  2. Shop around for the best offer and interest rate.
  3. Think of credit as the use of future income.
  4. Don't get a credit card just because they're giving something away.
  5. Establish a credit budget and keep track of all credit purchases.
  6. Pay bills on time so you won't have to pay late fees or jeopardize your credit history.
  7. Pay bills in full each month so you won't have to pay finance charges.
  8. Pay more than the minimum amount due. Debts will be paid off sooner, and you'll save money.
  9. Use credit only when it's necessary. Don't use credit to buy what you can't afford.
  10. Get a free copy of your credit report once a year and make sure it's accurate.

For more tips on saving money in these tough economic times, including preventing foreclosure, which bills to pay first, how to talk to creditors, saving food dollars, handling stress, and more, visit U of I Extension's "Getting Through Tough Financial Times" website at http://www.ToughTimes.illinois.edu.

Source: Evelyn Prasse, Extension Educator, Consumer and Family Economics, eprasse@illinois.edu

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