Credit/Debit Basics

Understanding credit and how to use credit and debit cards is essential to avoid debt. See how to recognize the risks associated with credit cards in order to use them properly.

Credit Card Tips:

  • Pay off the credit card with the highest interest rate first.
  • Pay your credit card bill as soon as you receive it, especially if you are carrying over a balance, to reduce your interest charges.
  • If you cannot pay the full amount, pay as much as you can each month.
  • Look for low-rate and no annual fee credit cards. You can get a list of credit cards, interest rates and fees: send $5 to RAM Research's CardTrak, P.O. Box 1916, Frederick, MD 21702, or for free on the internet at
  • For one-on-one credit counseling, contact the National Foundation for Consumer Credit at 800-388-2227 or

Advantages of Debit Cards:
  • Debit cards are easier to use when traveling. In many places, they are accepted more readily than checks.
  • They are easier to get than a credit card. This is especially true for younger people who may not have the income or credit history to obtain a credit card.
  • With a debit card, you do not have to carry around cash or your checkbook.
  • If your debit card is lost or stolen and you report it to the financial institution within two days of discovery, generally you are liable for a maximum of $50. That amount can increase to $500 if you don’t report it for up to 60 days. Policies vary, so check with your debit card company, and also ask how quickly they will restore the missing funds to your account.

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