Are your daily expenses getting higher and higher during this economic downturn? Are you looking to use a credit card to offset these costs, but not sure which one you should get? Have costs taken a toll on your balances? If you answered "yes" to these questions, the tips below are for you!

 Tip #1 - Know Your Credit Options

Chances are that you have probably seen ads for "cheap and easy" credit cards and may have even been enticed to take one out. Make sure to review the terms and conditions of credit card offers before signing up!  Be on the lookout for the following red flags:

• Interest rates upwards of 30%
• Annual fees nearing $100-$150, versus the typical high of $70
• High "account processing" and "program participation" fees up to $100
• No grace period

Tip #2 - Considering Cash-Back Reward Cards? Proceed carefully!

To help offset increases in the cost for gas and groceries you may consider applying for a cash-back rewards credit card. Cash-back rewards programs give you a percentage rebate annually based on your consumption of gas and other purchases.

If you sign up for a cash-back reward card, make sure to pay off your balance in full every month. These cards usually charge higher interest rates than regular credit cards.  

Some cash-back reward card options include:

• American Express Blue Cash (5% cash back on gas and groceries)
• American Express TrueEarnings  (5% cash back on gas, 1% on groceries)
• Chase Freedom (3% cash back on gas and groceries)
• Discover Open Road Card (5% cash back on gas)

Tip #3 -  Secured Cards Are a Safer Bet

Secured cards are a great option if you are just starting to build your credit or already have a damaged credit history. Secured credit cards use savings deposits from your bank account as insurance in case you can't make a monthly payment. In other words, you deposit an amount of up to $500 with the card issuer into an interest earning account. Because you are working to build and strengthen your credit history, you should only charge up to 35% of your limit on the card month-to-month.  The secured card will function very similarly to a regular credit card.  For a list of secured card issuers visit: http://www.bankrate.com

Tips #4 - #7: Basic Credit Management

• Tip #4: Make an effort to pay off your balance in full and on time every month. Otherwise you will have to pay interest and fees on the remaining balance.
• Tip #5: If you cannot pay the full balance, pay back as much as you can, and definitely more than the minimum payment. This way, you will save on interest and fees! 
• Tip #6: Never charge more than 35% of the limit on your credit card. If you exceed 35%, your credit score will go down.
• Tip #7: Correct errors on your credit report by writing a dispute letter to each of the three credit bureaus. Click here for letter templates.

Credit Card Management Tip Sheet
Credit Repair Tip Sheet

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