What would constitute a responsible use of credit?

Question

What are they?

Answer 1

Being responsible with your credit just means not charging anything that you cannot truly payoff. This means, credit cards, house, car, etc... doesn't matter. With credit cards, don't charge them up to where you can only pay the minimum payment, it's okay if you can't pay it off when the bill comes in, but have a plan of attack to paying it off you know like charging something tangible and paying it off within 6 months for example. I hope this helps :-)

Answer 2

Being responsible with credit means never charging things you can't afford to pay for in full when the bill comes. Being responsible means using credit to purchase things that earn a higher rate of return than the interest rate on the debt. For example, a home usually appreciates in value at a higher rate than the interest you pay on the loan.

Answer 3

You pay for your purchases when the bill arrives on time and in full. By using credit cards instead of cash you are building up your credit rating score.

The added value when you use certain cards, is that you can collect Air Miles, points, etc. So your money is getting a double bang for every buck you leave in the bank and only remove monthly to pay the credit card bill. (You are getting interest on the money in the bank and don't need to pay debit transaction fees.)