There are many reasons to open a credit, but not all of them are very good reasons. Opening a credit card because you don’t have sufficient funds to purchase the things you want is not a very smart idea. Millions of Americans find themselves in credit card debt every year. It may be nice to be able to borrow money, but don’t forget that it comes at a cost. Interest rates on credit cards generally range between 7 and 36% in the United States.  While this may seem small, if you have an unpaid credit card bill of just $100 that interest charge can be anywhere from $7 to $36. That means you are paying a lot more for the items you purchased than you originally thought.  And to be clear, the average credit card bill per month is much higher than $100.

So what might be a good reason to open a credit card? Well, one reason is to build credit. Everyone has a credit score that is used to show lending agencies what kind of credit history you have. If you have a lot of unpaid credit cards, or even multiple late payments, this poorly affects your credit score. If however you use a credit card, and other loans, wisely you build a good credit score. A good credit score will help you when you go to purchase or lease a car or buy a home.  In order to have a credit score you need to have a credit history and this is where a credit card can be good. If you pay off your entire bill every month (essentially use it like a debit card) then you will start to build a history of having good credit skills.

If you ever find yourself in over your head with credit card bill you should at least pay the minimum balance. While you will still be charged interest, this does not affect your credit score as badly. Make sure that you save every penny and pay off the entire balance as soon as possible.

Here are some great resources for credit info:
your650score.com
lifelock.com

There are so many cases of credit card fraud these days that it is vitally important to take the necessary steps to keep you and your finances safe. The following are some tips to help protect from fraud.

1.     When you get a credit card in the mail you should call and activate it as soon as possible. 


2.     Sign the back of the card when you receive it using your regular signature.

3.     Write “see ID” or “CID” next to your signature or on the front of the card to encourage retailers to ask for your identification when making purchases. While retailers are supposed to do this, many don’t so this serves as a friendly reminder to them.

4.     Sign up for online banking with your credit card account and check it frequently, at least once a week. The more frequently you check the more you know where your money is going and you can quickly spot transactions that should not be there.  If you wait too long to check your statement sometimes you cannot remember where certain charges are from and therefore might think they shouldn’t be there. Find more info here.

5.     Keep your credit card in a safe place, such as your wallet and always return it to the same location. This will help ensure that you do not lose your card, or if you do you will notice very quickly that it is missing.

If you happen to lose your credit card or it is stolen, contact your credit card company (such as Mastercard) as soon as possible. They can suspend activity on the card and issue you a new one. Also call your credit card company if you notice any charges that are unfamiliar to you. They can help you track where the charge came from and whether or not it was made by you.