Make credit cards work for you

Today, 140 million Americans are credit card holders; you are almost surely one of them.

Destructive web What the above statistics don't tell us is how many Americans are being swallowed up in a destructive web of credit card debt.

The average interest rate on unpaid credit card balances is now about 18.9 percent, and some issuers charge as much as 23 percent. Those interest rates combined with the average outstanding balance quoted above make it almost impossible for anyone paying the "minimum payment due" each month to ever wipe their debt off the books.

Not all bad All this doesn't mean that credit cards are bad - quite to the contrary. As a practicing professional, you may well have used credit extensively in the establishment of your practice.

Credit, used properly, can be a valuable tool for squeezing the most benefit from the money you have. But beware. If you allow him, the Credit Monster will ruin your life. Credit can work for you, or it can work against you. It's up to you to learn how to beat the Credit Monster at his own game.

The most important rule of sensible credit card use requires that you pay off the full balance each month. Once you find yourself paying the "minimum payment due," you have taken the first step down the road to financial oblivion.

Experts tell us that having too many cards in your wallet or purse is one way to lay the foundation for a credit catastrophe. A thick wad of credit cards can easily trick you into thinking that you have more money than you actually have.

Still, even the most conservative user should have at least two credit cards. Here's why:

Let's assume that the billing cycle date for your credit card is the first of every month. If you make a major purchase on, say, the 28th of the month, you'll be receiving your bill in a couple of days.

Now let's say that you have a second credit card with a billing date of the 15th of each month. Congratulations, you have two cards with widely separated billing dates. If you decide to make a major purchase on the 17th of the month, you should use the credit card that bills on the 15th. That way, it will be almost a month before you receive a bill for the purchase. This is a perfectly acceptable (and frugal) way to keep your money drawing interest as long as possible.

All you have to do to change the billing dates on your credit card is call the toll-free number for customer service. I use two cards for personal use and two for business. I note the billing date directly on each of my cards so that I can whip out the right one when I make a large purchase. For convenience, I don't bother switching for small, everyday purchases.

So, if you want to beat the credit gang at their own game, use at least two credit cards. Set up one for a billing date of the first of the month, the other for the 15th of the month.

Pay off each month Of course, to enjoy the full benefits of this sneaky system, you must pay off your full balance each month.