How to Make Wiser Use of Credit Cards

Regarding credit card debt, the good news is that fewer Americans are in arrears in paying their monthly credit card bills, according to the American Bankers Association. The delinquency rate on late payments dropped during the third quarter of 1996.

The unhappy news is that the delinquency rate remains historically high. And personal bankruptcies rose to a record of more than 1 million filings in the US this year.

That's why consumer groups urge Americans to exercise restraint when whipping out their charge or credit cards. Among steps recommended by consumer experts for 1997:

1. Use plastic only when a charge is absolutely essential. Don't use cards for purchases of basics, such as food or household supplies. At least, not unless you plan to pay the bill in full each month.

2. Pay down as much debt as you can, starting with the most expensive, in terms of interest fees.

3. Don't use cards for cash advances, which typically involve higher interest charges, unless you know you can pay the money back soon.

4. Use cards with low or no fees and the lowest possible interest rates. To check competitive rates, call Bankcard Holders of America at (540 389-5445) or Ram Research (800-344-7714).

5. Check the accuracy of your credit reports. The big three companies are Equifax (800-685-1111), Experian/TRW (800-682-7654), and Trans Union at (610) 690-4909. If you need credit counseling, one place to call for help is Consumer Credit Counseling Services (800-388-2227).