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Managing Credit and Using Credit Cards Wisely

Choose them carefully. Don't choose a card just because of the freebies that come with it or because there's no annual fee. Look for a card that's best for your borrowing habits.  Also, before you apply for a card, carefully review all other terms and conditions, which must be disclosed to you before you incur any charges on the account. Once you use a card, you have entered into a contract with the card issuer and you are obligated to abide by the terms disclosed to you.

Use credit cards carefully. Credit cards offer great benefits, especially the ability to buy now and pay later. But you've got to keep the debt levels manageable and pay on time. If you don't, the costs in terms of fees and interest or the damage to your credit score could be significant.

Pay on time to avoid late fees. One option is to arrange for an automatic withdrawal from your checking account to cover your credit card bill and perhaps other recurring expenses (but be sure to record the transaction). Another option is to pay online, generally at least two days before the due date to be sure it is processed on time. If you pay by regular mail, allow enough time for delivery and processing by sending your payment about a week before the deadline.

Check for errors on your credit card bill. If you find charges you didn't make, call your lender immediately to guard against fraud. Also, protect your rights under the law by mailing a letter to the card issuer's address for billing disputes within 60 days of the date of the bill. A phone call, fax or e-mail isn't enough to fully protect you.

Guard your credit card numbers from thieves. Never provide your credit card numbers - both the account number and expiration date on the front and the security code on the back - in response to an unsolicited phone call, e-mail or other communication you didn't originate. In general, only give your credit card or card numbers to reputable merchants or other organizations, and only when you initiate the transaction.