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Credit Cards: The Good, The Bad, The Ugly

Posted by on Feb. 28, 2012 at 12:00 AM
  • 45 Replies

I get them in the mail. Promising 18 months of 0% APR. Offering 20,000 bonus reward points. Handing out 100,000 miles for an airline. I'm talking credit card offers. I know some of you don't use credit cards, while others have some cards (and debt)...and still others of us fall somewhere in the middle.

These days, with so much shopping done on the Internet (hello, airline tickets), it seems you can't go through life without having at least one credit card. But what kind of card should you have? How many cards should a family use? Financial gurus vary on this, each one having a little different take on the whole credit card world. Here are a few basic ideas to think about when choosing credit cards (or to analyze if yours are working for you):

-- You need more than one, but not too many. There is really no limit to how many cards you can get, though the money pros say to avoid getting too many, as it could affect your credit score. You need to build credit for that score to be in a good range (see more about credit scores tomorrow), so you should have more than one card. A good idea: have one or two cards that are accepted everywhere, and then a store card at a place where you shop often (those usually offer good discounts when you use it, but be aware of high APRs).

-- How are you going to use this card? Ideally, you will pay off the balance every month, but if there is a chance you won't, your primary basis of choosing a card should be a low APR (annual percentage rate). Be sure to read the fine print : see if that low APR change after a certain period of time, if the APR is different for cash withdraws or balance transfers, and so on. Remember, the cards with perks -- with bonus points or with cash back or to get airline miles -- often have higher APRs.

-- Choose rewards carefully. If you are going to pay off that card's balance every month, then get a card with rewards that really will help your lifestyle. If you go on vacation a couple of times a year, then those with airline miles or associated with a hotel is a good idea. If you are a shopper, then maybe a cash-back perk is right for you. You commuters probably know many of the cards that offer gas rewards. Again, read those rules and regulation in uber-tiny print to see if there are any restrictions on those perks (there probably are some).

-- See what else comes with the card. Aside from the really attractive perks, what does being a card member mean? There are some great advantages to using certain credit cards to make big purchases, like travel help (cancellation insurance, care rental deals, and roadside assistance) as well as purchase protection and extended warranties.

How many credit cards do you have? How did you pick them?

ŠiStockphoto.com/Jirsak


by on Feb. 28, 2012 at 12:00 AM
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Replies (1-10):
ReesesPieces
by on Feb. 28, 2012 at 5:35 AM
6 moms liked this
Zero! So obviously you don't NEED more than one. :). We have lived almost 7 years without a credit card and I will never have one again. We have an emergency fund to cover emergencies and if we can't afford something, we don't buy it. We worked very hard to get out of credit card debt - we are never going back.
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yourpassion
by Kristen on Feb. 28, 2012 at 6:15 AM
3 moms liked this
We don't have one either. I won't have one again. If we need a "credit card" for something we use our check cards.
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jbyrd898
by Jessica on Feb. 28, 2012 at 6:36 AM

We have four. One Sam's and I just got it because they gave me fifty bucks off my first purchase on it. Anyway, I paid it off right then.

elasmimi
by on Feb. 28, 2012 at 7:48 AM

I got caught up in that credit card trap, and I have all paid off except one, and it's no interest for another year. Now I only use my Disney rewards card for things I can pay off immediately, because I'm saving for a trip.

mamivon2
by on Feb. 28, 2012 at 8:05 AM

ZERO... Dont want one, dont need one, cant afford one...

daerca574
by Member on Feb. 28, 2012 at 8:46 AM

 We have a couple and they are 0% interest.  If we charge on it, we pay it off fast.  Once the 0% offer is up, if there is a balance we transfer to a new card with 0%.  Nice to have a safety net on top of our emergency fund if we ever need it.

Leelee1008
by Member on Feb. 28, 2012 at 10:05 AM

None! I had two cards a JcPenneys card and a capital one card. I did well paying on them but then came a time where I had ran up alot on them and I lost my job. So I was in collections, I got a new job and I paid them both off. I wont get another card ever.

Leelee1008
by Member on Feb. 28, 2012 at 10:09 AM

thats a great idea.

Quoting daerca574:

 We have a couple and they are 0% interest.  If we charge on it, we pay it off fast.  Once the 0% offer is up, if there is a balance we transfer to a new card with 0%.  Nice to have a safety net on top of our emergency fund if we ever need it.


ceciliam
by on Feb. 28, 2012 at 10:19 AM

I have two.

towerjunkie1989
by Member on Feb. 28, 2012 at 10:31 AM

I'm getting a secured credit card to boost my score. I plan to get one tank of gas and a pack of diapers every month with it. Obviously those are things I have to get anyways so I will have the money to pay it off each month. My credit score sucks and I figure this is a good way to show I am trying to turn my life around. I am paying off my debt and refuse to get into any more.

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