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	Photo Illustration by DJ Greenfield
	Poor planning is a major factor in credit card debt.
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My father never answered the telephone. “If it’s a bill collector, tell them I’m not home,” he would say as I trudged over to answer it for him. He also never taught me to learn from his example, even after debt problems caused him to lose his house.

When I first went to college in 1993, I quickly received my first credit card. To me, it was a money tree, a gift from God and I quickly found myself avoiding the same bill collectors as my father.

In an ironic turn, I eventually would go on to become a financial planner and then a bill collector myself. Unfortunately, this was preceded by a bankruptcy and several years of self-inflicted misery.

Misuse of credit often leads to financial destruction. According to the Consumer Credit Counseling Service, the average American family carries over $8,000 in credit card debt. An $8,000 debt, at a rate of 18 percent interest, will take over 25 years to pay off and cost more than $24,000.
An estimated 1.3 million credit card users filed for bankruptcy last year alone. Teenagers or college students with credit cards carry an average balance of $2,000.

It need not be this way. Responsible use of credit can lead to a better financial life. The choice is simple, and these logical steps will help you use your credit to your benefit instead of becoming a servant to your debt:

1. You only need one credit card.
Gary Johnson, Director of DFA Credit Counseling, 2101 E. Broadway Road, Tempe, says, “Keeping and using more than one card makes it easier for you to get carried away.” Anything that makes it easier for you to get carried away is not a good thing.

2. Pay your card(s) in full each month.
If you pay your bill in full every month, you will help establish your credit rating quickly and will avoid the massive interest rates credit card companies charge.

Credit card debt is the most expensive debt around, and paying the minimum payment will keep you paying for the maximum time. You can’t overspend if you know that you must pay off your card in full each month.

3. Plan out a budget and stick to it.
“Cash bleeds if you’re not on a budget,” Johnson says. Write down all of your purchases for a month and see where you are spending money. If there isn’t enough money to go around, spending needs to be cut somewhere, or income needs to increase. Those are the only viable long-term options.

“Ninety percent of the people we see are not budgeting and are not controlling their spending,” Johnson says. If you feel the desire to use your card to buy something for which you can’t afford to pay cash, rethink that idea.

If you need to use your card to pay the electric bill or buy food on a rare occasion, that’s one thing. Using credit to go out to the bar with your friends is another.

4. Use cards for convenience, not because you can’t afford to pay for your purchase.
The credit card’s greatest benefit is its convenience and ease of use. Rather than having to always carry money around, you only need to carry your card. Credit cards are almost always necessary for booking flights, hotel rooms or rental cars. Just remember that they aren’t a substitute for cash.

5. Never use one credit card to pay off another.
If you’ve already ignored step 1, make sure you don’t ignore this one. This practice is perhaps the surest step down the winding road to financial destruction. The one exception to this rule would be if you are already in collections and have the opportunity to save money on one card by paying it in full. If so, do it. Then tear up the first card and do everything in your power to pay down the balance on the new card.

6. Save for large purchases.
Credit cards are not for major purchases unless you pay your bill in full at the end of the month. If you want a new computer, resist the urge to put it on your card.

Instead, save for it in your bank account. Put away the amount you would pay on your card each month until you can pay cash for your larger purchases. According to Johnson, “You will enjoy the things you do spend money on more and you don’t feel guilty when you spend what you can afford.”

7. Do not use credit cards to borrow money.
In case you didn’t get this point from one of the other steps, let me be clear. Credit cards are not for borrowing. Next to your friendly neighborhood loan shark, they are the worst way to borrow due to high interest.

“Credit cards are wonderful things, but they are a lousy way to borrow money,” says Johnson.

Follow these seven steps and you will establish good credit and build the habits that will serve you well throughout your future. Ignore them, and you’ll soon find yourself dodging phone calls from bill collectors. And when they do call, tell them my father isn’t home.