Surely you have a credit card, or five. After all, they are convenient, easy, and allow for a universal way of spending. But, with a credit card also comes a dangerous territory.

It’s not just ridiculous debt you have to worry about — there are also interest rates, charges, and credit scores to keep in mind.

Whether using or paying off your credit cards, it’s important to remember the following:

Know your Limits: In everything, we are told to know our limits. Heeding this warning is particularly important when it comes to finances. Knowing the limits of your credit card can prevent you from getting in way over your head, and way over the amount of money in your bank account.

Most credit cards will always have a limit, even those who claim to be no limit are just marketing hype and reserved for the very rich. Your credit card company should warn you or reject transactions once this limit has been surpassed. But, they don’t always do this. Instead, they allow you to go past your limit then they charge you a fee for doing so. If you don’t keep track of your limits, nobody will.
It’s also important to make sure your credit card isn’t reducing your limits as you try to pay off your credit card debt. Doing this can hurt your credit score.

Draw the Line Way Before Your Credit Line: Sure, you have a huge credit line just waiting to be used. But, even if you can pay it off, charging to the brink of your credit line can hurt your credit score. Your credit scores are sensitive: everything you do or don’t do can affect them. This includes how much of your credit you actually use. If you are using 80 or 90% of your credit limit, your credit score will reflect poorly.

Instead of walking up against the credit line, try asking your credit card company for a higher limit. If you routinely charge $500 a month and only have a $600 credit line, ask your company to increase it to a thousand. This way, you can still charge $500 a month, and you’ll only be using half your available credit. If they won’t increase your limit, try spreading out your purchases, using cash or checks for half of them or even making more than one credit card payment a month. All these tactics can help your credit score go one way: up.

Don’t Cancel All Your Cards: Some people cancel their credit cards as soon as they quit using them: they don’t want them to get lost or stolen. But, doing so can actually hurt your credit score. The reason for this is it reduces your total credit line, making it look as though you owe more than you actually do. As soon as you cancel a card, the ratio of used credit to available credit becomes skewed and your credit score can drop.

Watch your Rate: When applying for a credit card or transferring debt, interest rates should have you interest. You want a credit card with a low interest rate but, just because it’s low to begin with, it doesn’t mean it will always stay that way.

If your rate is going to change, your credit card company will inform you in writing. Some of these rates can be protested and prevented by signing something and sending it back. But, more often than not, your rate change notice is simply thrown away unsigned and unread. Instead of assuming your interest rate is fixed, be sure to read everything your credit card company sends you. If there is something you feel you should contest, do.

It’s also important to keep in mind that if a rate is “fixed” it can still be changed. All a company needs to do is inform you of this change in writing.

Know Your Grace Periods:  Grace periods used to be thirty days: you had a month before your purchase began accruing interest. Nowadays, grace periods can be as short as three weeks or be completely nonexistent. If you pay off your bill each and every month, a grace period is particularly important: look for a card that has a long grace period and grace them with your patronage.

Make Sure You got the Right Card: At one time or another you’ve probably got a letter from a credit card company saying you are pre-approved for a card that seems to be a steal of a deal. You apply and assume that that exact card, with the exact deals, will arrive in your mailbox within days. Well, you’ll get a card, but that doesn’t mean it will be the right one. Be sure to look over the credit card terms carefully to assure you received the card you wanted. If the card that is sent to you is one with bad terms, simply cancel the account.

Credit cards should all have a “use with caution” label applied to them. Not only do they encourage debt, but every action you take with them influences your credit score, which ultimately influences your life. Thus, it’s important to know what you are getting into, before you get into your wallet and pull out your VISA.