C3: Loans and Credit: Options and choices You should generally try to avoid using credit cards and other credit accounts unless you know that you can pay off the amount in full every month. In other words, you should only use your credit card if you have enough cash in your checking account to pay your bill immediately, and if the money that you are spending is consistent with your monthly expense budget. It is okay to use a credit card if you can easily pay cash or write a check for the full amount but you wish to use a card because it is a little more convenient. You should think of it as money spent as soon as you charge your purchase, though, because you will be paying the credit card company very soon after you make the charge. There are many alternatives to credit that you can use to purchase goods and services. For example: 1. You can write checks from your checking account, but you must remember to list your payments in your checkbook! 2. You can use debit cards, which are just like checks. When you give the vendor your card and (s)he gives you a receipt, you must think of the receipt as a cancelled check. 3. You can get special prepaid credit cards that require you to pay money into a special bank account. The card then works just like a debit card. The attached checklist, for example, was created by someone who did a little comparison shopping and found himself in the following situation: 1. He does not want to carry bulky checkbooks to stores. 2. He does not fully trust the vendors where he buys his goods, and wishes to have the right to dispute charges before money is deducted from his checking account. 3. He wants to avoid costs and fees as much as possible, and is willing to pay his bill on time and in full each month. Based on the information in the attached checklist, he decides to use a normal credit card as a convenience for his small routine purchases. He decides to avoid checks because of the inconvenience of checkbooks, to avoid debit cards because of the right to dispute charges, and to avoid prepaid credit cards because of the need to avoid costs. You can review the attached checklist to confirm that our comments are correct. After that, please go ahead and create a checklist for yourself!