As with other things in life, it pays to be responsible. It is so important for your financial freedom to have good credit and maintain as high of a credit score as possible. Nowadays, people with bad credit are given more opportunities than ever before. What they don’t realize, however, is that they are paying a horrible price. Here are five major reasons that a “bad credit” credit card can cost you hundreds or even thousands of dollars each year.

1. Interest Rates. If you have bad credit, you can still get a credit card. But, do you know how much your interest rate will be? Your interest rate will be considerably higher if you have bad credit. This is because you are viewed as a financial risk. Lenders will only give you a high interest rate until you have proven that you are no longer a credit risk. With bad credit, you probably won’t ever be offered a credit card with 0% APR. Instead, your introductory rate will be at least 15%.

2. Processing fees. Get prepared to pay a one time processing fee if you have bad credit. Lenders say “one time processing fee” to make it sound nominal. However, this is not the case. You will be charged a processing fee to cover the risk associated with lending to you. Save yourself money by only having good credit.

3. Annual fees. There are many credit cards available with no annual fee. If you have bad credit though, don’t expect to qualify for one of these cards. Once again, you’ll be charged an annual fee to cover the risk of lending to you. Annual fees aren’t just $20 per year. You could pay hundreds of dollars per year to have a “bad credit” credit card. Many credit card issuers will also charge monthly maintenance fees to your account.

4. Late payment fees. You certainly won’t be paying $10 late fees if you have bad credit. Credit card companies increase your late fee depending on how bad your credit is. Not only will you be paying quite a lot more for late payments, but credit card companies will be quick to report your late payments to credit bureaus. Save yourself money and the added embarrassment of paying late fees by making your payments early.

5. Lower credit limits. You can expect a lower credit limit if you have poor credit. This is because of the financial risk associated with low credit scores. Lower credit limits can also lower your credit score based on the balance amount charged relative to the total credit limit amount.

As you can see, there are several ways a “bad credit” credit card can cost you more money. It would be better to take a few months and fix your credit before applying for a credit card. You will get a better interest rate, no processing or annual fees, lower payment fees and higher credit limits. Give yourself all the opportunities you deserve with good credit.

Credit cards can be a good thing if you know how to use one.  These are ways that credit cards can make your life better:

1. Accumulate reward points for free merchandise.  Get a reward credit card and get free stuff.  Each time you use your credit card, you’ll accumulate points that can be redeemed for discounts on gas, movie tickets, restaurant gift cards, and more.

2. Buy Now, Pay Later.  Credit cards give you the option to make a purchase now and pay for it later.  This is a great benefit, especially for emergencies.

3. Accepted virtually everywhere.  Credit cards are generally accepted everywhere. This is great when you are running low on cash.

4. Easy to carry.  A credit card takes up less room than a wad of cash does.

5. Online shopping.  Pretty much the only way to buy things online is by using a credit card.  Your credit card comes in handy if you do a lot of online shopping and many offer a virtual credit card number to help protect your identity.

6. Build credit.  Using your credit card wisely is one of the best ways to build your credit.  This will show lenders how responsible you are and make them more willing to loan you money.

7. Teach responsibility.  Credit cards can teach you responsibility because you have to account for each purchase you make in order to stay out of debt.

8. Teach money management.  Credit cards are a great way to teach you how to handle your money.  You have to carefully budget your money and your purchases.

9. Variety of payment options.  Many times, you can chose different payment options.  You have the flexibility to chose your due date and payment amount.

10. Online monthly statements.  Most credit card companies offer an online program where you can view your credit card activity.  This helps manage credit card purchases tremendously.

11. Not having to carry cash.  Isn’t it a pain and a hassle to carry cash all of the time?  Credit cards make it so easy to swipe and sign.

12. Good customer service (most of the time).  You can’t call a customer service department if you have a question about the cash you carry.  You can, however, call in regards to your credit cards and credit account.

13. Earn cash back.  You can earn cash back through a percentage of your purchases.  This is a great way to combat rising inflation too.

14. Give you a buffer until payday.  Credit cards help get you through until payday, especially when unexpected circumstances arise.

15. Tool for tracking your expense.  It is so easy to track expenses and purchases now with different tools that the credit card companies offer.  Most companies have an online tracking system.  Many also offer a year-end statement that categorizes all of your purchases from the entire year.

These are just a few of the ways that credit cards can make your life better.  Credit cards can be an unmatched tool that can assist you on your quest for financial freedom.

As parents, we worry about our children all the time.  We worry about who and what they will become and about how they will handle responsibility.  It is so important that we teach our children how to manage money.  Start teaching them about money when they are young so they can get into good habits with their money. 

A recent survey showed how important it is that we teach our children about money.  Charles Schwab and Company recently published an online survey and the results are stunning.  Parents had taught their children to do laundry over 70 percent of the time.  When it came to balancing a checkbook, only 34 percent of parents had showed their children how.  Here are 10 ways to teach your child how to be responsible with money.

1. Discuss it.  Many times parents feel that it is better to protect their children from financial trouble.  If you aren’t honest with your child about your family finances, they won’t know how to handle their own finances one day.  It is important that they understand that you can get into financial trouble if you are careful.  Find the best time to discuss finances with your child, whether it is one-on-one or in a family setting (like the dinner table).

2.  Get an Account.  Open a savings account for your child as soon as you can.  If they are young, you can be on the account with them.  Take a field trip to the bank and help them understand how these savings accounts work.  Each time they deposit money into their account, they will see their money tree grow.

3. Don’t Spoil.  One of the biggest dis-services you can do for your child is to give them everything they want.  You need to set boundaries while they are still young, even toddler-aged.  It is important that they understand that they can’t have everything they want all of the time.  This principle will go a long way when they are older and will help them choose between needs and wants.

4. Chores.  Chores are a great way to teach your children how to work.  Try and reward your children in small ways to help them do their chores.  If they make their bed in the morning, give them a small treat.  They will begin to understand the importance of working hard.  As they get older, give them more responsibility with chores.  Be careful not to spoil them with treats or money, but teach them the value of work.

5. Keeping Up.  Your children watch every move you make.  If you are trying to keep up with the Joneses, STOP!  If you are spending money you don’t have, you are teaching your children it is OK to get into debt.  Stop caring what other people think and be responsible with your money so you can teach your children how to be responsible with theirs.

6. Pay bills.  Let your children help when you pay bills.  They will begin to understand that everything costs money.  If your child is old enough, help them write out the checks.  They will love the experience and learn a lot.

7. Credit Cards.  Add your child to your credit card while they are still young.  This doesn’t necessarily mean they need to use the credit card, but having their name in your account will build their credit.  Be careful with this one.  Make sure you are helping your child’s credit, not hurting it.  Only add them to your card if you have a credit score over 700.

8. How to Shop.  When you take your child shopping, go with a list and stick to that list.  Whether you are going to the grocery store or the clothing store, they will see that it takes discipline to stick to a budget and be responsible with money.

9. ATMs.  ATMs are dangerous to a young child.  To them, this money is magic.  If you use the ATM in front of them, help them understand where the money is coming from.

10. Don’t come to their rescue.  If you have taught your child how to be responsible with money, let them be on their own financially.  This only needs to happen when your child is old enough to make their own money and make good decisions about how to spend it.  If your child gets into trouble financially, be careful not to save them.  By doing this, you are only teaching them that they can come to you to bail them out at any time.  If they get into trouble, help them work out a plan to fix the problem.  Don’t fix it for them!

We all look forward to teaching our children good principles.  Make sure you teach your children how to manage money and be responsible with their decisions.