Clear credit card hurdles.

Take these steps for a secure debt management plan

Although inappropriate credit card use can lead to financial disaster, proper use can largely enhance your life (see Declaration of Financial Empowerment, Principal No. 5: To engage in sound budget, credit, and tax management practices). Most credit cards offer free merchandise, cash rebates, product discounts, and frequent flier miles (make sure to read the fine print). Plus, credit card users can reduce trips to the bank, carry less cash, and purchase extended warranty and insurance protection services to safeguard themselves against unscrupulous retailers by contesting fraudulent charges. So why have credit card, gotten such a bad rap?

Most of us don't practice smart credit card use. In 2000, Americans charged more than $515 billion on credit cards, according to credit card tracker CardWeb.com. And that privilege cost consumers $65 billion in finance charges with the lending as the only beneficiaries.

But there are some surefire ways to make credit cards work for you. First, experts suggest that you be honest about your credit card use. According to Robert Pagan, financial advisor of Mount Vernon, New York-based Vernon and Associates, a financial services company, you should only use credit cards if you're consistently able to do three things: (1) stick within your budget; (2) pay your credit card bills in full; and (3) pay your bills prior to the due date to avoid late fees. Here are some other ways you can clear credit card hurdles:

* Pay more than the minimum. "Don't get trapped into paying minimum monthly payments," advises Luther Gatling, founder and president of New York-based Budget & Credit Counseling Services Inc. (www.buccs.com; 800-475-1994). Of course, it's best to pay all balances in full each month, but if you don't, pay as much as you can. Adds Gatling, "If you pay the minimum monthly payments on a $3,000 purchase at 18% interest, it would take 11 years for you to pay it back."

* Pay on time. According to Gatling, "Each time you're late, you can be charged up to $29 in late fees. Plus, every piece of negative information goes on your credit report and stays there for seven years--even one late payment."

* Limit the number of credit cards you hold. Keep one major credit card such as Mastercard or Visa and a charge card such as American Express. Remember, creditors can turn you down if they think you have more credit available to you than you can afford.

* Reserve credit card use for major purchases or emergencies. If you haven't exercised smart credit card use in the past, start now. Use a credit card as a last resort.

* Pay off your debts aggressively. By delaying the repayment of your debts, you're prolonging the amount of time your credit companies can enjoy interest at your expense. To pay off your credit card debt, consider tapping financial sources such as savings, a 401(k) plan or other investments. Few of those vehicles beat the high interest rate charged by most credit card companies.

* Ask your creditors for a lower interest rate. According to The Motley Fool's You Have More Than You Think by David and Tom Gardner (Simon & Schuster, $13), "In almost every case, with a simple phone call you can negotiate your interest rate down, demanding that your credit card company set its rate at 12% or lose your business."

* Secure credit cards in your own name. "All women should get credit, whether they are married or not, in their own first name," advises Gatling. "In a divorce, death, or separation, it's hard to establish credit when you've only [obtained credit] in your husband's name."

* Keep good records. According to the book, What Every Credit Card User Needs to Know by Howard Strong (Owl Books, $9.95), you should save all of your bills and receipts for at least one year, but six years is ideal. Write the date that you received the bill or letter on the correspondence. Also keep copies of any letters that you sent your credit card company or that you received from them. File materials by year.