There are many great strategies for using a credit card to make purchases with. If you consider the use of a credit card a very short commitment that allows you to buy something you don’t have money in savings to cover, you will be using credit in a way that will be a benefit to you. On the other hand, if you make purchases and then pay only the minimum payment, you will have locked yourself into debt for a long time.

Finding a credit card with a lower interest rate also affects the total you will pay for the items that you purchase. The impact of higher interest rates can be dramatic. If you finance an $8,000 car and pay 12 percent interest rather than 19.8 percent, you could save the difference of $30 each month. At 6 percent interest, you could have $968 in your own savings account at the end of 2 1/2 years.

Check out the total cost comparisons for a $500 TV…

Cost of Item | Interest Rate | Payoff Time | Total Cost
$500 television    19.8%             2 ½ years         $650
$500 television    12%                2 ½ years         $578