We have all heard horror stories about credit card debt that gets out of control and dishonest people stealing other identities and charging credit cards up in someone else’s name. It is true; these types of things do happen, and it can be enough to scare you out of getting a credit card at all. However, it is necessary for everyone to establish a credit rating for himself or herself because there is almost no way to avoid needing some type of loan at some point. The need for houses, automobiles, boats, home or car repairs, vacations, and all sorts of other things pop up in life, and having a good credit score will allow you to borrow money at a reasonable interest rate and with a minimum of headaches. A bad credit score, on the other hand, will likely increase the amount of money you pay in interest, increase the down payment required, and/or make it difficult to find a lender.

Getting and responsibly using a credit card is one of the easiest ways to start building a good credit history. The trick to making sure that your situation doesn’t become one of the nightmare stories on Maury is to make sure you do not rely on your credit card to overspend and buy things you don’t really need or can’t really afford. Sometimes that can be difficult since we all have those “impulse moments” and love instant gratification.

One way to be sure you do not end up with a ridiculous amount of credit card debt is to adhere to this one simple routine. Every time you make a purchase with your credit card, put the receipt in an envelope. Then, go to your ATM and withdraw the cash or write a check and deduct the amount from your checkbook. Then, put that cash or check into the envelope as well. When the credit card bill comes, pay it off using the “envelope method.” Using a credit card and paying it off is one of the easiest ways to improve your credit score.