Last August, The Motley Fool, one of the most entertaining personal finance and investing websites out there, published an article called the 8 Commandments of Credit that I feel every consumer should read. Some of the commandments are common sense, some of them may not apply, but an educated consumer has a duty to read and understand what these rules mean and ensure that they follow them. They address some of the tactic that credit card companies use to try to extract as much money as they can from unsuspecting consumers like you and I. In this series I will elaborate on some of these commandments and give my personal take.

Commandment I. A credit card is just that — a credit card

You shouldn’t approach a credit card and its associated line of credit as an obligation to spend that money; or even proof that you should or even can spend that money without consideration to how you’ll pay off the card. You should be looking at that credit card as a proxy of your own cash, you should treat it no differently as you would your own debit card (where you can only spend what you have in your account), because you don’t want to be carrying a balance.

If you need a short term loan of any kind, it’s usually better to investigate other options (unless you are able to get a 0% on purchases or even 0% on balance transfers) before succumbing to the usual rates of 18%.

Source: The Motley Fool