As a credit card user, having the right understanding of credit cards is necessary to stay out of credit card trouble. The credit card agreement doesn’t spell out responsible credit card use and unfortunately, many people learn these lessons the hard way.

It’s not free money. Having available credit feels like you have extra money to spend. With $1,000 in your checking account and $2,000 credit limit, you might think you can spend $3,000. Technically, you can. But, you have to pay back what you borrow on a credit card. And, following the rule of charging only what you can afford to repay in full, you should be spending something less than $1,000 (the amount that’s in your checking account).

Sure you can pay back your credit card balance later, but depending on your interest rate, you could end up paying a hefty cost for that convenience. Furthermore, there are so many better things you can do with your future income, like save up for a vacation or retirement.

You might have the debt long after you’ve enjoyed the purchase. If you’re making small payments on your credit card balance, it will take several months or maybe even years to completely pay off the balance. By that time, you may not even remember what you purchased in the first place. Or even if you do remember, the joy of your purchase may have long been extinguished. Now, you just have a big debt to pay off.

The faster you pay off your credit card balance the better. That way, your purchase isn’t tainted with the burden of credit card debt.

Relying on future income for present purchases is risky. When you use a credit card, you're promising income that you haven't received yet. It’s great to be hopeful about your future income, but in reality, you haven’t earned the money, so how could you promise it to someone else. And, when you do earn it, how likely is it that you’ll want to spend it on credit card debt? How do you know you won't have other, more important expenses to spend your income on? When you get your paycheck, you’ll want to use it on things you can enjoy today, not things you enjoyed yesterday or worse, last year.

If you have more debt than assets, you’re broke. Your credit card debt should never exceed the amount of money in your savings and investing accounts. And, if it does, then you’re broke and you really shouldn’t be using credit cards. You can take your net worth from negative to positive by paying off your credit cards and building up the amount of money you have in savings. The closer you get to completely paying off your credit cards, the closer you also get to financial security.

Credit card companies make billions of dollars on consumers who don’t keep credit cards in perspective. For a big bank, the best credit card users are the ones who run up big balances and then pay them off over decades with just the minimum payment. Don’t be one of these people. Be smart and disciplined with your credit cards to avoid the burden of debt and bad credit.