| By :
Molly Wider
Charge cards, lines of credit, buying over time, and other delay-pay mechanisms are earning a pretty bad rep these days. But credit, by itself, isn't a bad idea at all. It is what allows most of us to buy our homes, our cars, take better vacations, and purchase other big-ticket items we'd rather not do without until we have enough cash in the bank to pay for them. And most of us are okay with paying a bit more for our purchases in order to have the convenience of owning them when we need them. Building good financial habits and a strong credit history can reduce other costs. When your credit score is high, you can use it to bargain for better mortgage rates with your lending institution. And that alone can save you many thousands of dollars. You can do the same thing with your charge card lender. If you have great credit, call them up and ask for a lower interest rate-if they won't give it to you, there are plenty of other vendors who will. Good credit can also allow you to take advantage of long term no-interest loans that allow you to purchase appliances and other large household items without paying a cent-sometimes for up to 18 months. Good credit can get you 0% interest over 5 years on a car loan-a huge savings. So a good credit reputation can give you lots of leverage when it comes to making costly purchases, and potentially save you a fortune on home or car mortgages or big appliance buys. So if you're good at using credit to your advantage, you can save all kinds of money by being able to take advantage of sales, long term no-interest offers and leveraging your good credit for lower interest rates. The trouble with credit starts when it is used as a permanent income-extender for daily living, like buying groceries or paying the utility bills, and forgetting about ever paying off the balance. That's when you can bet your credit use is out of control. A quick control check can reveal your own dependency. Leave your charge cards-and all other plastic-at home for 24 hours. Can you do it? If you discover that you're reaching for plastic several times a day, chances are you've developed a bit of a credit card habit. Break the habit by learning to leave the cards at home. It can be tough at first-addictions are hard to set aside. Start slowly, and, as they say-one day at a time. But, as they also say-just do it. Gradually, you'll become accustomed to not carrying money or cards with you-and you'll learn to live within your real means, without debt.
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