living on credit

Holiday season is one of those times of the year that people dust off even the highest rate credit cards to get some shopping done. I was once one of them - foolishly breaking out the 25% APR Sears card so that I could pick up an electric screwdriver for my brother-in-law.

We were young and foolish once and made the mistake of charging everything and spending more money than we had. It took nearly a year of much more than the minimum payment to dig ourselves out of that hole. However, instead of turning this into one of those "be smart - ditch all your credit cards" posts, I will instead recommend that anyone with crippling credit card debt get some credit card advice and learn how to make the best of their credit cards' generosity. There are lots of resources out there for people looking to develop a budget and make sure not to overspend, even during the holidays.

In addition, the world of credit cards is changing every day. I used to receive low APR "fixed" card offers all the time, but these days if you read the fine print you will often find that "fixed" only means "fixed" until they decide to change it. There are also new approaches to credit card programs being offered all the time, many of which can be explained at sites that offer credit card news.

For a long time, I felt that credit cards were "bad" but now I see them as a useful financial tool that, when not abused or misunderstood, can be a lifesaver. We especially like the cards that offer reward "points" towards different programs. I've personally stayed for free at hotels about a dozen times in the last few years, thanks to these programs.

Best of all, nobody says that you absolutely have to carry a balance and pay interest. We use our credit cards all the time, but pay off our balance each month, so we retain good credit (rather than no credit), but don't throw money away on interest. It's also nice knowing that, should an emergency arise in which we don't have the immediate funds to cover, we can always rely on credit cards to give us a good month's cushion.