Six rules for avoiding credit card disaster

Here are the rules to help keep you from becoming a credit card victim. Credit cards should be a convenience for payment, not a source of credit. This requires that the entire balance due on the card be paid each month. If the entire balance is not paid on any month, the card should not be used again until the balance is zero. The only exception would be an “essential” purchase such as for gas to go to and from work.

The six credit card rules:

1.  Pay the entire balance due each month.

2.  If a balance remains unpaid at month’s end, do not use the card again.

3.  Do not use more than one credit card.

4.  Do not accept credit cards from specific retail stores.

5.  Do not pay off one credit card with another.

6.  Do not purchase gifts for people with your credit card. Give them a nice card or letter instead. It is too easy to let your generosity exceed your ability to pay.

To monitor and review your spending habits, try this exercise. Take your credit card charges and your cancelled checks for the past year and do the following: Sort each charge or cancelled check into two piles. One pile is for the “must” payments such as utilities, taxes, medication, rent, mortgage payment, etc. The other pile is for the optional spending, such as meals at restaurants, gifts for people, recreational events or equipment, etc.

This review of how you spend your money may give you some guidance on how to spend more wisely and it may even help you create a surplus of cash for a savings and investment program.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today’s small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it.

Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission.

Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations.

She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.

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