The 7 Pillars Of Responsible Credit-Card Management

Credit cards are a convenient way of paying bills and covering daily expenses, but they make it far easier for the financially challenged to carelessly wrack up debt, cripple their credit rating or fall prey to identity thieves.

In the book "On My Own Two Feet," Manisha Thakor and Sharon Kedar, both chartered financial analysts, offer seven guidelines for responsible credit-card management:

Watch those interest rates!

Credit-card companies often lure clients by offering low interest rates in the beginning. But these rates tend to shoot up after the introductory period expires. Worse, sometimes you never even get the rate you think you signed up for, because it's only available to those who "qualify" — and unbeknownst to you, you didn't.

Pay all your bills on time.

Not just your credit card bills: All your bills. Why? Because it's legal for credit-card companies to raise your interest rates if you're late on anything from your house payment to your phone bill.

Don't use cash advances or "free" checks.

As a rule, the interest rates are much higher on cash advances and credit-card checks than they are on your actual credit card. Bottom line: Avoid using them unless you absolutely have to.

Limit the number of cards.

The danger of having too many cards is that it gets harder to track your spending. And the more bills you have, the higher your odds become of forgetting to make a payment.

Say no to "add-ons."

A lot of credit-card companies offer add-ons, such as disability insurance or account-monitoring services, but don't take the bait. According to Thakor and Kedar, you don't need them.

Report stolen cards right away.

If you report a lost or stolen card within 24 hours, you're only responsible for $50 worth of charges.

Shred unsolicited offers.

Never throw credit-card offers in the trash without destroying them or you leave yourself open to identity theft. It's not uncommon for thieves to steal these offers and try to sign up for credit cards in other people's names.