If you want to own credit cards, you have to make sure that they don’t end up owning you. This means that in a nutshell, you have to understand the true rules of your credit cards. You have to make sure that you’re focusing on the bigger picture when it comes to credit cards. Are they evil? We don’t believe that credit cards are evil. As we’re fond of saying, that’s like assuming that the hammer in your shed is dangerous all on its own. That’s not a mentality that we ever want to really adopt.

The truth here is that yes, credit cards can do damage…if you’re not responsible with them. If you make sure that you don’t run up your card limits and spend well under your monthly budget, then you shouldn’t have any trouble. Look, everyone knows someone that has lost their job suddenly and had no recourse but to run up a lot of credit. That’s one situation that’s growing, and that’s a real shame. The truth is that you want to stave off the need to use credit by really investing in yourself. Before you eye something shiny or pretty for your collection, you need to be thinking about the emergency fund at all times. You have to be thinking about the type of life that you ultimately wish to cultivate for yourself.

This brings us headfirst back into the world of credit cards. You have to think about why you’re using the credit card. Are you trying to live a lifestyle that’s well beyond your means? Then you definitely want to avoid credit cards. Otherwise you’ll have your own credit card horror story, and that’s not something that we would wish on anyone. It’s better to really think about the type of credit that you want to have, and then build that type of credit history.

Paying your bills on time has to be one of the top reasons why some people have great credit, while others don’t. You can’t assume that you’re going to be able to build a high credit score if you can’t even show the lenders that you can pay your bills on time. That would just be horrendous, and there’s no point in going down that road if you don’t have to. It would make a lot more sense to instead invest in getting better credit through properly managing your due dates.

The biggest reason why most people do not have good credit is that they pay late, but they pay late because they procrastinate. You probably already have the money just sitting around at payday — why not make sure that your bills are paid right then and there? That would avoid not only the late fees but the extra interest.

Interest is basically a fancy way of saying “profit for the credit card company”. And really, they’re not going to loan you their money without getting something in return. In a way, that’s the way that you need to look at credit. It’s something that’s going to affect you for a long time, so you might as well ensure that you’re not getting swept away. You might as well make sure that you’re reading the fine print.

Are you itching to get a rewards credit card, so you’re applying for any one that you can get? Be careful. You might not get your rewards card at all. The credit card company has every right in their agreement to switch your card to another type as long as you qualify to have a card in the first place. In short, what this means is that the rewards card you were hoping to get in the mail just isn’t the one you will end up with. It might be a basic card with a much lower limit.

Those shiny advertisements that you see in the mail and on TV are often ones that cater to people with very high credit scores. There’s nothing that says that you can’t have a very high credit score, but you have to be realistic. If you’re thinking that you’re going to magically have a top notch credit score with a bunch of late fees and even tons of inquiries on your report, you’re sadly mistaken. Keep in mind that you can have a high score at one credit bureau and a less than perfect score at the other. It’s all about who stores what information. If you try to just ignore the importance of credit, you’re going to get left behind.

There’s a big debate about whether credit is even necessary. Until people have the type of savings accounts that let them put down the full cost of the house they have always dreamed of — including closing costs — then they need to maintain good credit. Do you really want to be denied your dream of a house or a car just because you skipped out of the credit system?

As always, life is what you make of it, and we can only give you general advice. As long as you keep our tips in mind, you will understand more about the credit system than most!