It has been my self principle not to spend money that I don’t have. And to support that, I believe in a one credit card policy. Some thrift-freaks may avoid plastic like the end of days but there are some salient points in keeping a credit card. What factors should you look into when choosing a credit card? Read on for some handy tips.

Interest kills

Say if you have about $2000 balance split between 2 credit cards at 18 percent interest, that means you already lose $360 a year! And chances are you might have larger balances or more credit cards. Chances are, if you aren’t too keen on paying on-time, you’ll be neck-deep in credit card debt, especially after the spending seasons like the holidays.

Why keep one?

If I discarded all the others why not dispose of all, right? Well, no. Cards are handy. They can serve as ID, allow you to make transactions over the phone or over the internet. And credit cards can be life savers in dire straights. Or if there are deals better purchased via credit cards.

Some expenses, I believe, can be stretched over a period of time once in a while. Some of these can be mid-range expenses that you can defer payments because of your credit card. Plus there can be promos with discounts and better deals.

How to choose one

• Scout for great credit card deals. Card companies may carry out promos once in a while.
• If you’re a miser and pay off your balance each month, then a card with no annual fee and with a grace period during which there’s no interest will be great for you. Never mind the interest, since you pay on time, you won’t get any.
• If you carry a balance from month to month then transfer your debt to the card with the lowest rate. However, chances are, you’ll have to pay an annual fee.

Cash or card

Here’s a tip, know when to use your card and when to pay in cash. (Varying from country to country) some stores might offer lower prices for cash purchases. If you’re out to use it for 0% installment plans, by all means do so. This may go against my “don’t go spending the cash that you don’t have” principle but come to think of it, you can actually earn a bit by letting your money sit in the bank first and let it earn some interest. Just make sure you budget the further installment payments in your budget.

For more thoughts on credit cards and finance, check out our sister blog, Money Crashers.