Borrow What You Can Afford

• Whether you're applying for a credit card or a personal loan, it is wise to borrow only what you're able to pay back because once you sign the agreement, you enter a legal contract to pay the money back. For example, if you're looking for a home, you should consider a home that falls within your income level.
  
  

Spend Within Your Means

• When using your credit card, your income should exceed the amount you charge on the card because late monthly payments can negatively affect your credit report. For example, if your check is $400.00 this week but you charged $450.00 the previous week, you will have trouble paying the card balance because your check was used to pay other bills. If your go a few more weeks without paying the balance, it could show up on your credit report.
  
  

Use Alternatives To Credit

• When possible, try to use cash, checks or your debit card for small purchases rather than your credit card because these purchases add up on your bill. For example, when buying groceries you should consider using cash or a check to buy the groceries.
  
  

Pay More Than Minimum Balance

• If your credit card bill has a huge balance, then you should pay more than the minimum balance if possible. When you pay only the minimum balance each month, it takes longer to reduce the debt you owe, and you could be paying mainly the interest that accrues on the card rather than the actual balance.
  
  

Considerations

• While credit is useful for many things in life, we shouldn't depend on credit to sustain us financially. One way to build a good financial stability is to have six months' worth of emergency savings to help us when job losses or health crises come.