A credit card can be the ultimate frenemy. As this presentation reports if you use it sensibly it can be a great friend. But use it wrong and it can be your worse enemy

1. Helpful Financial Information from National Debt Relief …
Understanding The
Things You Should
And Shouldn’t Put
On A Credit Card
A credit card just might be the ultimate frenemy. Depending on how you use it, that
little piece of plastic could be a good friend or an awful enemy. There are really only two
secrets to keeping that credit card a good friend. The first is to use it sensibly. The
second is knowing what and what not to put on it. Continued ...)
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2. Helpful Financial Information from National Debt Relief …
Using a credit card sensibly
This is relatively easy. If you want to use that credit card sensibly you need to keep the
balance low and pay it off at the end of every month. What's a low balance? That's
pretty simple, too. It's whatever amount of money you have to pay off your card when
you get your statement. How much is that? This is question that only you can answer,
which means doing a little budgeting. Sit down with a spreadsheet program or a pencil
and a piece of paper and list all of your expenses – both fixed and variable. Your fixed
expenses would be things like your rent or mortgage payment, car payment and
insurance. Your utility bill, transportation costs, clothing and entertainment would be
variable expenses. When you finish your list add up everything and subtract this number
from your monthly take-home pay. If you have money left over, which we hope you do,
you should save some of it and then budget the rest for your credit card. Let's say, for
the sake of the example, that after you subtract your fixed and variable expenses and
the money you’ve earmarked for saving you have $100 left over. This then is the
balance you could afford to carry on a credit card because you would know you would
be able to pay it off at the end of the month.
The danger of carrying balances forward
Why you don't want to carry a balance forward from month-to-month is because of the
power of compounding interest. This is something else that can be either a friend or an
enemy. It can be your friend when you're saving money but an enemy when you create
debt. The way it works with a credit card is that once you carry a balance forward you'll
be charged interest on it, which will be carried forward to the next month where you will
again be charged interest. This means you are now paying interest on interest. That's
compounding. And it can get ugly. If you were to run up a $5000 balance on your credit
card at 15% and made only a minimum payment of $112.50 it would take you 266
months to be rid of that debt and would cost you $5,729.21 in interest – or more than
that original balance.
What to put on a credit card
You've already seen the real answer to that question, which is to put no more on that
credit card than you can pay off when you get your statement. So long as you know
what that number is you can put anything on that card and you should probably charge
as much as possible as this then becomes a record of your spending, which you could
use in your budgeting.
An exception
The one exception to this rule of charging only what you can afford is major purchases
like a washer-dryer or refrigerator. If you need to buy one of these big-ticket items and
don't have the cash available it could be okay to put it on a credit card. Just keep in

3. Helpful Financial Information from National Debt Relief …
mind that you will need to pay back the money, which means budgeting for it. If you
were to put a $1000 item on that credit card you should budget an extra $100 or $200 a
month to pay it off as quickly as possible and keep from falling victim to that old devil of
compound interest.
What not to put on a credit card
It's important to remember that credit card debt is unsecured debt. Many experts believe
that it's the worst way to borrow money because it typically carries a very high interest
rate – much higher than a car or home loan. Plus, credit card debt is never tax
deductible as is the interest you pay on a home mortgage or student loan. Given this,
there are five things you should never put on a credit card.
The first is college tuition. There are literally millions of American adults who are still
paying for their college educations years after they left school. In many cases they
haven't even been able to find work in their fields of study – leaving them members of
what's now called the "underemployed."
There are two big reasons why you should never put college tuition on a credit card.
The first is the aforementioned compounding interest. The second is that it's better to
fund your education with low-interest student loans, grants, part-time jobs and
scholarships as this would save you thousands of dollars over the long term.
Second, don't put your income taxes on a credit card. Even if you find yourself hit with a
big tax liability, don't charge it. While the IRS makes it easy to make your payments with
a credit card there are several reasons to not do this. First, the payment processing
company will assess a fee of 1.88% to 2.35% and this will only add to the burden you’re
already facing. In addition, the IRS will let you set up a payment plan with a much better
interest rate. As of this writing its underpayment interest rate charge for each quarter is
just 3%, which is much better than you would get with any credit card.
A third thing you shouldn’t put on a credit card is a vacation. While getting away from
the stress of everyday life can feel really good don’t finance that trip with a credit card. If
you do this you'll only be coming home to the problems caused by that debt. A better
solution is to plan a vacation that fits within your means such as camping, staying at
hostels or visiting friends and family members. You say that's not your idea of a dream
vacation? Then set up a vacation fund, contribute to it every month and you will
eventually have the money in hand to finance your dream vacation.
You should also never put a big wedding on a credit card. You might be tempted to have
a really lavish event but just as with a vacation, you need to plan a wedding that will fit
within your means and avoid creating credit card debt. We know that this will be a very
special day for the two of you but it's not worth it if you have to begin your lives together
laboring underneath a huge pile of debt.

4. Helpful Financial Information from National Debt Relief …
Last but not least, don’t put medical bills on a credit card. These bills can be staggering
but if you talk with your healthcare providers you should be able to get payment plans
that have little or no interest and payments you could actually afford. It's possible that
you could also tap into a charitable organization for financial help. But once you put
those bills on a credit card that's it. You ‘re stuck with that debt and with a big monthly
payment probably for years to come.

5. Helpful Financial Information from National Debt Relief …
Does this sound familiar?
• You are tired of worrying about money…
• You are losing sleep due to mounting credit card debt…
• You are fighting with your partner about the bills…
• You are living paycheck to paycheck…
• You are falling behind on your debts…
• You are losing hope…
It’s time to talk with National Debt Relief!
Call 1-888-703-4948
Or go to http://www.nationaldebtrelief.com