There are many different types of credit cards. A department store or chain of stores may issue retail credit cards for use in the main store or in any of its branches. The store handles the processing and the billing. Bank cards, like MasterCard and Visa, are credit cards issued by banks and accepted by millions of businesses in the United States and abroad. They can be used at hotels, restaurants, department stores, theaters, and airline ticket offices-just about anywhere. Major oil companies issue credit cards that provide credit for gas, oil, and other products. Interest charges and fees vary with each type of credit card.

Used wisely, credit cards provide people with income flexibility to help them manage short-term money problems. Although a credit card may seem like the perfect answer to your money problems, if not used wisely you can get into a lot of trouble. Using more credit than you can afford is a trap.

According to the experts, credit cards should be used for convenience and safety. When buying by phone, on line or just the ease of not carrying cash are all examples of appropriate uses of credit cards. If you use your credit card properly you will pay off the total you charged each month. If you do not pay off the balance owed you will have to pay interest. Credit card bills state clearly what your minimum payment must be, but beware! Minimum payments are a trap; they are often designed so that it takes months or years to pay off the balance. Some companies are now offering prepaid cards whereby you can put money on your account in advance.

Avoid Excessive Credit Debt by:

• Remembering the differences between wants and needs.
  
  
• Pay close attention to your spending habits.
  
  
• Pay your credit card off every month.
  
  
• Refuse to charge anything you cannot pay off within the monthly billing cycle.

How to Handle Problems with Credit Card Billing

• Errors or unauthorized charges on your credit card bill should be reported immediately to your credit card company by phone and preferably followed up in writing. The Fair Credit Billing Act limits your responsibility for unauthorized charges to $50.
  
  
• If you used your credit card and you are not satisfied with the goods or services, you can also dispute this with your credit card company. AGAIN, check the terms of your credit card company on how to dispute the charges and follow the procedures provided to you.