The key to a strong financial future is not eliminating credit cards, but instead using them to strengthen your credit and your overall financial health. Here’s how to make friendly with your credit cards so you can use them to your advantage to achieve a positive financial future:

• Think of your credit cards as a lifeline in case of an emergency.

Having access to quick cash in the event of an emergency is vital. Consider what you would do if your car broke down and you needed it repaired to get back and forth to work, or if your furnace broke during a cold snap. There are certain, unexpected expenses that need to be immediately handled, and credit cards are often the best solution to handling these emergency expenses. Don’t cut off your nose to spite your face and ditch your credit cards. Having a credit card or two in your back pocket to handle emergency expenses may prove to be extremely beneficial.

• Think of your credit cards as the path to a solid credit score.

Credit card usage is one of the easiest ways to build a strong credit history and, in turn, a strong credit score. Credit card usage, over time, shows the major credit reporting agencies that you are able to handle lines of credit and monthly payments. If you want to build a strong credit score so you can enjoy low interest rates on everything from car loans to mortgages, begin using a credit card in a responsible fashion.

• Consider credit cards if you need to consolidate higher interest rate debt.

Using a credit card, with a competitive interest rate, to pay off other higher interest rate debt, such as car loans and personal loans, for example, may prove to be a smart financial decision, as it will enable you pay off the debt sooner and pay less finance charges on that debt. In other words, you may be able to enjoy more money in your pocket by simply finding a great, low-interest-rate credit card.

Absolutely.

Does it take time, effort and patience?

Absolutely!

Recovering from a past of late and missed payments, overdue notices and mounting credit card debt can be overwhelming and time consuming, but it can be done. With a great deal of patience, perseverance and hard work you, too, can begin to repair your financial past and look forward to a bright financial future.

Your Action Plan for Improving your Credit:

1. Order a copy of your credit report from all three of the national credit reporting agencies and pour over every detail included in these reports. If you notice any discrepancies or errors, immediately report them to the appropriate credit agency, as small mistakes can wreak havoc on your overall credit score.
2. Make a list and prioritize your debts, preferably according to the oldest debts or those with the highest interest rate. Use your credit report to complete your list so that you don’t forget any debts.
3. Make a budget and stick to it. While you’re at it, look for other areas in your monthly budget on which you can cut back. Do you need a cup of coffee from your local café every morning, or can you save your money by instead bringing a cup of coffee from home? Do you need premium cable service, or can you downgrade to a basic cable service?
4. Contact your creditors and ask for easier payment plans or a decrease in your interest rate. They may deny your request, but they may not! It’s never too late to ask!
5. Make the minimum payments on all of your credit card debt and put all of the extra money towards the highest interest debt. After that card has been paid off, continue onto the next card until all the debt has been paid. It is important to continue paying at least the minimum payment on all of your other debts during this time! This may be a long, arduous process, but keep your ultimate goal in sight so that you can lead a more financially sound future.