With over six million credit cards to choose from (and counting), it is important that people understand the function of credit cards, how to reduce their credit card debt, and how to use credit cards wisely.

Credit cards are important because they establish a credit record. A good credit record can establish a faster approval on a line of credit for big ticket item purchases such as vehicles, houses, expensive jewelry, and clothing. Good credit records are achieved by paying monthly credit card payments on time over a consecutive amount of time.

Effectively reducing credit card debt can be accomplished in a number of different ways. Most importantly, a commitment to reducing credit card debt requires a change in mindset: just because you have a ten thousand dollar credit limit does not mean you should try to reach that limit as fast as humanly possible.


A few reasonable ways to reduce credit card debt include :

  1. Reducing the total number of credit cards you use.
  2. Prioritizing your payments based on the balances you owe, eliminating the highest balances first.
  3. Focusing on paying down those credit cards with the highest interest rates first.

Using credit cards wisely requires a bit of financial discipline. In order to use credit cards responsibly, you have to make a concerted effort to use them more sparingly, in cases of emergency, when access to cash and other resources are unavailable, and when necessity requires. This does not mean you should completely deprive yourself of every luxury known to mankind, however. It just means that credit card use should be second in command instead of first.

Using credit cards responsibly and wisely is somewhat like eating a healthy diet. A balanced diet translates into an overall healthy lifestyle. In much the same way, having a balanced financial budget that does not rely too heavily on credit card use can produce an overall healthy financial lifestyle. 



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