Credit Cards are one of the easiest instruments of civilized society. The companies come as ‘pussy cats’ and leave as ‘lions’. However there are a few long-established rules that have stood the test of time, These rules help you navigate that industry without sweat. The good thing about the credit card rules is that they are echoed all over the internet. Most personal finance websites and frugality blogs have it in one form or the other. I will outline some of them here and I am certain there may be new ones that my readers know that I have not included. Please feel free to add them here too.

1. Pay off your balance ALWAYS. Any dollar not paid will accrue interests in the next billing cycle and that is money wasted.

2. Send in your payment in good time electronically. Mailing a check may sound good, but if there is any delay or your mail gets lost, then you get hit with the late fees and it may even ding you credit score. Electronic payments have become3 so reliable these days that it is now the norm. Caveat: That you pay electronically does not always ensure that your money will get there in time. One of the popular hardware chains in the US has a store credit card that takes 3-5 days to process online payments. They actually state it clearly on their website so if you send your payment late, you get the late charges.

3. Always look at you credit card bills. This is common mistake seen with couples where only one person handles the finances. Spurious charges get paid because the other party “assumed” it was a proper charge. Check and verify that you actually spent what you are paying.

4. Getting rewards cards makes sense if there are no hoops like expiration and minimum expenditure before you can claim a reward. However, I must say that with the recent Credit Card Accountability, Responsibility and Disclosure Act in the United States, rewards have been shrinking fast. Check out this post by Liz Pulliam on MSN Money.

5.Watch your interest rate just in case you have to carry a balance. I started off on one  American Express Credit card three years ago at 8.99% APR. Soon enough (possibly when they saw that I was indeed payingoff  my balances), it went up to 10.98%. Well who cares, I pay off my balances every month and that is the way it is going to be.

6. Use automatic bi-monthly payment. If you set up you account to send in payments on the 1st and 15th of every month, you will indeed NEVER miss a payment. One may ask “So how much should I pay?”. Well, that depends on what your average charges on the card is. Pay half each time. If the money is short, you can make it up in the second payment and if it exceeds the charges, you have to choice to reduce the second payment or pay down the next month’s balance.

7. Get account tracking free software like Mint.com or Quicken and USE IT!