Make Sense of Your Money: 4/3/09

Finance at a glance brought to you by Geezeo

When to Use Credit and When to Use Debit
by Katie McCaskey

Use Debit Cards When….

You Want to Buy Something Inexpensive or Consumable. 
It’s hot, you’re thirsty, and you want a soda. If you don’t have cash (first choice!), whip out your debit card. Some merchants have minimal purchase requirements before they will let you use a debit card. Do not put inexpensive purchases or consumable purchases on credit because you’ll end up paying much more for it over time.

You Want to Avoid Lingering Interest Charges.
The quick pain of $35+ might be worth it instead of adding to a growing credit card balance. (If making this choice is your dilemma, consider it a red flag.)

You Need Fast Cash
If you’re in a hurry for cash use your debit card. Preferably use your card at your home bank to avoid ridiculous ATM fees. Taking a cash advance from your credit card will incur a much higher interest rate and could even trigger an interest rate hike on your credit card. Not fun.

Use Credit Cards When…

You Shop Online.
Credit cards offer greater fraud-protection coverage.

You Buy Something Big
Some credit cards offer additional warranty protection beyond the manufacturer. Also, you might be eligible for promotions or additional incentive accumulation offer by the card.

To Establish Credit History
You need to establish solid credit history if you’re just starting out… or starting over. Do so by purchasing an item on the credit card and paying it off entirely at the end of the month or by meeting minimal payment requirements. Note: minimal payments will greatly extend the cost of whatever you’ve purchased.

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5 Ways to Avoid Simple Financial Mistakes
by Hannah Waters

#1. Check Your Accounts Regularly – If you are on top of your spending and savings then you will never have a problem with your bank accounts. 

#2. Keep Your Receipts – You never know what type of fee or charge that may show up on your credit card later on down the line and you want to ensure that you have your receipts if something does happen. 

#3. Keep Track of Monthly Spending – Know how much your bills, loans, payments, etc. are each month in order to keep the right amount of money in your account. Nowadays everyone has direct deposit and withdrawals scheduled from their accounts. Getting rid of the paper trail also means that it is more likely for you to forget what date payments get taken out of your account and not realize that you do not have enough money in your account. 

#4. Remember the Checks You Wrote – Keep a mental note to yourself or a post-it note next to your computer that reminds you what checks you have written that have not yet gone through. This way you won’t forget every time you check your account and you should ensure that you always have at least the amount of the check left in your checking account.

#5. Don’t be Foolish – Easier said than done right? But honestly, if you do not have the money to spend then resist the urge. 

These five tips may help you avoid some financial mistakes that will be costly later on down the road. Just be sure to remember that it is easy to get yourself into debt and financial trouble but much harder to get yourself out of it when times get tough!

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Want to make more sense of your money? Check out Geezeo.com.

photo credit: Morgue File

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