Credit cards can be great as long as you don't let them own you

There can be some real benefits to credit cards but it all depends on how you use them. If you find yourself unable to pay your bill off each month and can only watch it steadily grow, you might want to change the way you use credit. Take a look at these simple tips?

Best ways to use your card

• Charge your big purchases as soon after the billing cycle closes as possible. This way you have an entire month before your bill comes and you have to pay.
• If you have your finances down to a fine art and you keep current on your bills, you should charge everything. This way you'll have a record of all your purchases on your monthly statement, and you only have to write one cheque a month to the credit card company instead of small ones for each purchase.
• If you carry a balance on your card each month, be careful about what you charge. The rule of thumb is to avoid charging perishable items such as groceries, because you'll eat them right away but could end up paying for them for months as the interest slowly raises the price of your food. Coupon clipping doesn't help when a £2 box of biscuits ends up costing £4 with interest.
• Also, if you carry a balance, use your card for as little as possible - when you write cheques or fork over cash for each purchase you'll be more conscious of your spending and will end up spending less. Alternatively, use a debit card.

Choosing a card

It may sound obvious but in general you should use the lowest interest card you can get. Credit card companies constantly offer promotions with interest rates as low as 4.9 per cent. Some card jugglers switch their balance from card to card and always pay the low rate. Just be careful to note when the promotional period ends because the rates go sky-high and you need to be prepared. Find out more.

You should also look for cards that offer perks such as cash back for every purchase, discounts for going to certain restaurants, frequent-flier air miles and Internet access - anything extra that you get just for using your card.

Five ways to spend less on credit cards

1. If your card charges an annual fee, ask that it be removed. Many cards don't charge a fee, so you can always switch to one of these (be sure to tell this to the customer service representative when you call). Most credit cards will remove the fee if you simply ask.
2. Get perks or miles with every purchase. As long as you're using your card responsibly, sign up for a mileage card or one with perks like money back with each purchase.
3. If you accidentally make a late payment, call and ask whether the late fee and interest can be removed. Most cards will do this once if you ask.
4. If you constantly make late payments because the bill is due two days before you get paid, call your credit-card company. Ask whether your billing date can be moved to a week later so you can deposit your wage and still pay the bill on time.
5. If your account is in good standing, ask whether your interest rate can be lowered a percentage point or even a fraction of a point.