Credit card debt is one of the biggest reasons that people turn to bankruptcy. This gives rise to the myth that credit cards are always a bad idea and that you should avoid them at all costs.

That’s not always true. One of the best ways to build your credit back up after bankruptcy, for instance, is to use secured credit cards to show lenders you can handle debt and to increase your credit score. Cards can be used properly so that they don’t create excess debt. Here are a few tips that can help:

  • Only spend on things you need. These are purchases you’re going to make anyway, so it doesn’t matter if you use a card and then pay it off or use cash directly.
  • Never miss a payment. Never carry a balance. At the end of each month, pay whatever the balance on the card is — not the minimum payment — so that you do not have to pay interest.
  • Avoid cards with annual fees. If the card has no fee as long as you pay the balance each month, it costs you nothing extra.
  • Create a budget and stick to it. As long as your budget works with your income, it doesn’t matter if you use a card or not. You’ll be able to afford it.

These tips can be very helpful after you declare bankruptcy to help you avoid getting into financial trouble again. If you haven’t declared yet, they can also help to illustrate the potential pitfalls of cards and whythese issues exist. Make sure you are aware of your legal options to seek financial freedom.