Would you be interested in learning how to lower one of life's largest expenditures - INTEREST? The secret lies in using an easy to acquire instrument that some people fear and others take for granted. It's a credit card! 

Up to now, a credit card has been something that you should fear because of the problems it might cause. But, if you use it correctly, you can turn it into a tool. According to Gerri Detwiler, author of the "Ultimate Credit Handbook", a visa/mastercard is the best indicator for loan officers how credit worthy an individual is. Turn this into your advantage by making your visa/mastercard a tool to show loan officers you pay on time with regularity. 

How then exactly do you use it as a tool? Great question. Remember the credit report? That's what we want to keep in mind because that's the "report card" that loan officers use. Here's a list of tips:

• Use your card every month to make small purchases and pay off the entire amount
• Use your card instead of writing checks - you'll get credit making numerous payments on time. Credit cards, unlike checks, get recorded in your credit report.
• Increase your credit line by showing your responsibility.
• Pay your bill before the "due date" 

Your goal here is to get a card in your own name and make the account look active. Doing so consistently will make your credit report look better (see Section 6 - How a loan officer looks at you). Obviously, you want to make sure that you pay on time while you are activating your account. Some methods to help you do so include:

• Getting your bill mailed to the correct address
• Making sure that your bill is getting to you
• Keeping your bill in a separate folder from your "biology" notes
• Staying organized (see "Staying Credit Organized")
• Writing the payment check right away and mail it 

Most of these recommendations will help you avoid the typical pitfalls students fall into. 

Very important points that are ALWAYS overlooked!

• the credit report makes no distinction between a $40 payment made on time versus a $40,000 payment made on time. We can use this to our advantage by making a lot of smaller payments on time and every month.
• Charge and pay off fully small amounts on your credit card (use the free transaction recorder)
• Make sure that you build credit in your own name. Just because your credit card has your name on it doesn't always mean you're building credit in your name. According to PIRG, "it can't be co-signed, it must be in your own name". Many times if you're using your parents card, the credit reporting agency doesn't credit you. Apply for credit in your own name, and on your own. 

PLUS know that a credit card gives you protections that cash doesn't! A little known fact is that there are more laws to protect credit card transactions than cash transactions. "Lawmakers have drafted safeguards that protect consumers when they are entering a loan arrangement."

In short, when you're in doubt about a good OR service you're purchasing… use your credit card. For example, if you're paying for a car repair that might or might not have been done correctly, pay with a credit card. IF it isn't, you can dispute the charge in writing using a form letter.

When you use a credit card, the credit card company becomes the middleperson between you and the goods/service provider and the burden gets transferred to them to prove that what you bought was valid. When you use cash, you have to sue using small claims court, complain to the BBB or whine and moan until they refund you… all bad options. 

For more pitfalls see our next section.