Credit cards

A reader asked me to discuss the fundamentals of credit cards. Many sites have done this far better than I would; see BankRate or CreditCards.com, or Google "credit card basics."

While we're here, a couple of pieces of my own credit-card philosophies. This advice applies to those with good credit; I expect those with bad or no credit have fewer options.

• You should be getting money back. It may be cash, or frequent-flier miles, or merchant gift certificates, or whatever, but you should use a credit card that pays you. The typical dividend is 1%. If you are considering a card that pays in something other than money, try to convert the payout into dollars so that you can compare; for example, conventional wisdom is that a frequent-flier mile is worth about two cents; the real number is probably a bit lower.
• You should not be paying an annual fee. If you are, the card should be paying enough above what a typical card pays to cover the fee. Most don't. For example, the United frequent-flier card has an annual fee, but still pays at most 1%.

On the other side, for those who are in credit-card debt trouble, help is available. Be careful, though; while there are many legitimate debt counseling services, there are also a fair number of crooks in this space. A relative of mine founded Myvesta, a nonprofit debt-counseling service, so I can vouch for their legitimacy. Their site also includes a lot of good basic information about credit cards.