As part of my day job, I write finance pieces for Ninemsn's Money website. I've also written a book about paying off your credit cards. Before you ask, yes I do - pay my card off in full each month, that is. One thing I discovered during researching the book is that the positive thinking that infiltrates so much of our daily lives (translates loosely into 'she'll be right' in Australia) is, as I suspected, highly overrated. Particularly when it comes to your finances.
Experts agree that one of our biggest problems with credit cards is optimism. We think - no, make that firmly believe - that we will pay our debt off in full every month, without fail.
So we don't read the fine print when we choose our card. We sign up for rewards, air miles and every bell and whistle we can find, without thinking about what will happen if - just imagine - we bite off more than we can chew one month and, gasp, don't pay off the full amount.
So the huge interest rates that often underline rewards programs are overlooked. Unfortunately, once they kick in, they cost us big bucks, which can mean that every month we roll over (or 'revolve' as the lingo goes) more and more debt. All because we didn't take a balanced view of our credit card usage.
It doesn't always pay to be optimistic. In fact, credit cards are one area where keepin' it real is essential. Get to grips with how you actually use your card - not how you think you do or how you'd like to - and you've got a better chance of wrestling your debt into submission.
For help with choosing a card visit www.cannex.com.au