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We all live in an age where life would be difficult without plastic cash. Whether we are shopping, travelling or eating out, Credit cards come in handy everywhere. Some of us have multiple credit cards at hand, with different interest rates and rewards schemes. Others may stick to taking out a single card for use. Still others have no credit cards at all. They believe credit cards are dangerous, like playing with fire. They steer clear of using credit cards, applying for them or having any sort of credit history because they never have used it. The problem comes when there's a mortgage or a loan to apply for. Then the banks check out credit history first. With no credit history, trusting a consumer is difficult.
If you have been someone who has never used a credit card and is running into troubles with insurance, mortgage or loans then it is high time you start to use a credit card or apply for one. If you know how to use the card right, you will not end up in debt. The thing is credit card debt is not really as big a problem as you think. Not every household in America is sunk in credit card debt, its money management that is the problem in many cases. When applying for a credit card, you need to start someplace, with no credit history to get a card with no annual fee would be difficult but you can get one that has a low annual fee. Once approved, you need to be sure you make purchases on your credit card in a limited manner so as to maintain a credit record.
A common mistake people make is assuming that the balance has to remain in order to have a credit history. This is untrue. You can close your balance every month with no worries, in fact if you do so it is better. It shows you are good in dealing with revolving credit and handling your finances.
When people get a credit card they tend to assume it is extra money. Never consider your credit card as emergency fund. That is the biggest mistake. If you use it one shot for a large spending spree or in the event of an emergency, you have to pay it back. It is not free money, there is going to be additional interest rates and the outstanding balance will build up. The sooner you realize it is not to be misused the better you can handle things.
Another factor that people tend to ignore is the fact that credit cards can be expensive. If you have taken a card seeing a low interest rate, then make sure it is constant and not an introductory offer. Otherwise in not time the interest rates will shoot up and you will find yourself unable to deal with the bills. If you want to have a clean credit history make sure you always make your payments on time, bad credit history can create complications worse than no credit history for you.