During tough economic times, the importance of properly using a credit card can make a significant difference. One mistake and your credit card balance(s) could quickly climb further into debt. Knowing the right way to manage credit cards during these stressful periods may help propel you towards a peaceful financial picture.

One of the most important steps for tough economic times is knowing where you presently stand financially. A credit card budget may help accomplish this. It can help save money and lower the balance on your credit card. Here are some credit card tips that can be used during tough economic times.

Start a Budget

Begin a credit card budget and try not to deviate from it. This tip can be the hardest to accomplish, yet it can offer the most reward. By postponing major purchases and reducing "the impulse to spend," you can set a firm base to live comfortably. Here are three tips to sticking to your credit card budget: 

- Discipline - This step is the most important of the three. To ensure that you stick to your financial goals, set realistic goals that can be reasonably achieved.  

- Organization – Knowing your present financial situation is important when sticking to a credit card budget. Keep detailed notes on purchases to avoid spending more than the budget limit. 

- The Right Tools – Financial tools can make sticking to a budget easier. You can visit http://www.financialservicesguide.net/tools.html to use  free financial and/or  payment and interest calculators.

It may be a good idea to pay your bills online through electronic payment to avoid late payment fees. It may also be a good policy to pay more than the minimum amount due on your credit cards. Once you pay off one card, use these extra funds to make higher payments to another credit card with a high interest rate. This helps to get rid of debt faster.

Maintain a Budget

It is suggested that you carry only one credit card when moving around town. This card should only be used for high priority items. If you are maxed out on credit cards, take steps to decrease debt by paying a little more than usual on your higher interest cards first.

Resist the urge to participate in ‘Buy now, pay later’ credit programs. These programs tend to be very risky during tough times.

Look for reward programs offered by your credit card company. Switching to a credit card that offers lower interest rates can also be beneficial during tough economic times.

Know What Is in Your Credit Report

Most banks and other creditors rely on your FICO, or credit score, to determine how much interest they will charge you. Having a low score may cause you to be charged a higher interest rate, require you to make higher down payments, or even cause you to be denied for credit. It may help to examine your credit report. Here are the errors in a credit report that may cause you to be denied for credit: 

- Late payments, charge offs, and other negative information 
- Information dated older than seven years 
- Bankruptcy that occurred over ten years ago (this information should no longer be included in your credit report) 

- FICO score

Everyone is entitled to one free credit report every 12 months. To view your credit report, you can request a copy of it from one of the major credit reporting agencies:

• www.experian.com
• www.transunion.com
• www.equifax.com

Negotiate with Creditors

If the amount you owe is substantially high, contact your creditors. If you are not able to make a payment, it is best to call and negotiate a repayment plan with the credit card company. Most lenders try to work with customers who take the initiative in lowering their debt. However, it is not feasible to negotiate a payment plan without adequate means of sticking to your commitment.

Keep Money in Reserve

Establish an emergency fund bank account. In shaky economic times, anything can happen. By starting a savings account to save money, you can be prepared to continue payments on your credit card if an unexpected situation arises. Try to save enough money in your savings account to pay on your credit card for at least six months.

Additional Resources 

- You can read more about the FICO score and how it affects your credit at http://www.myfico.com/Downloads/Files/myFICO_UYFS_Booklet.pdf. 
- You can learn how not to be a victim of credit card fraud by visiting http://www.fraud.org/telemarketing/teletips/cardtip.htm  
- Get a free credit report by one of the three major credit reporting agencies by visiting https://www.annualcreditreport.com/cra/index.jsp