5 risks you shouldn't take with your credit cards © Corbis

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5 risks we take with credit cards

The potential for going deeply into debt isn't all that makes plastic hazardous to your wealth. Other, more-subtle temptations can also cause trouble.

By CardRatings.com

When you think about the words "danger" and "credit card," the first thing to pop into your head is probably debt. The over-your-head kind of debt that can happen when you're not paying attention to how much you're spending.

But debt is only one danger to avoid when it comes to your credit card.

Here are a few other dangerous things you might be tempted to do with a credit card:

1. Give it to your kid

The inherent danger involved with giving your offspring a credit card is nothing new to parents. But the Credit CARD Act has created some new situations to think about.

The law prohibits card issuers from giving credit cards to anyone under 21 unless that individual has proof of enough income to pay off debt. As a result, some parents are co-signing on cards for their under-21 kids or adding their kids as authorized users on their own credit cards.

A young person with Mom's or Dad's credit card can be dangerous unless you have a plan. Make it clear that your kid needs your permission to make a purchase with the card. Stress that the card is an alternative to carrying cash -- not a way to get something that there isn't money to pay for.

Make sure you monitor credit card purchases, just in case that plan isn't being followed.

2. Give it to an employee or contractor

One of the most-famous examples of this situation involves Kim Kardashian. She was hired as a "consultant" for R&B singer Brandy Norwood. Kardashian claimed that Norwood's mom gave her a credit card to make purchases and allegedly went on a shopping spree with her client's credit card. The damage? $120,635.82.

If you run a business and you need to give a credit card to an employee or contractor, choose a card that allows you to set spending limits. Another option on the horizon is MasterCard's inControl, which lets you set a limit on your card. When a cardholder reaches the limit, the card is rejected. But the best step is to monitor your credit card statements and know what your balances are.

3. Use it on a website that's not encrypted

You must make sure you're on a secure, encrypted website before you key in your credit card number. Secure websites have encryption software designed to prevent identity theft.

When you're on a secure website, you'll see a lock icon in your browser's address bar and "https" in the URL. Note the "s" at the end of "http."

Continued: Don't spend all the way up to your limit

More from MSN Money and CardRatings.com

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30Comments
10/27/2010 4:10 PM
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To add to number 5, make sure you cut your card up into several tiny pieces.  After that, dispose of the pieces in different trash cans around your house, because if your household is like mine, not all the trash gets thrown away at once.  This way, if some idiot goes dumpster diving and finds pieces of your card, they will not be able to complete it to do any damage.

10/27/2010 4:21 PM
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If you don't know these things you don't need to have a credit card in the first place!  Common sense people! Duh!
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Maybe this article should read "Credit Card Tips for those who just landed on this planet from Mars!"  Seriously... any real tips out there?!Thinking
10/27/2010 4:28 PM
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What a crock. Useless filler space.
10/27/2010 4:33 PM
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I know. lol.  These are credit card tips for retards.  Make sure the balance is zero and the card is cancelled before you cut it up and throw it away.  Really?!!!   Thanks, that's a new one to me.  I thought the card automatically sends a cancellation signal wirelessly to the issuer when it's tossed in the trash.  You learn something new everyday.
10/27/2010 4:40 PM
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they are great if you pay them off every month, that eliminates a lot of the small print
10/27/2010 4:47 PM
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Oh, I shouldn't let Kim Kardashian use my credit card to buy things?  Thanks, I should write this down so I don't forget.
10/27/2010 4:50 PM
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Here's one they forgot...the most important one! DON"T USE ANY CREDIT CARDS AT ALL!!! Pay CASH!
I recently got a "Discovered Bondage" card in the mail...I did not even apply for it..so I cut it up..printed a copy of a Vaseline ad and wrote a little note as to what they could do with their card and mailed it back to Discover lol. Credit is for fools...CASH Rules!
Thank You Dave Ramsey!


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I just got a pre-declined cred card offer in the mail. (just kidding, but I am sick of bi-weekly offers) If I'm pre-aproved why do they still need my personal bio???
10/27/2010 6:01 PM
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I wish the article was titled 'how to have common sense in your life'.


10/27/2010 6:05 PM
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LOL I really don't know why I keep getting stringed into these sort of articles expecting different results. I guess I'm a fool for thinking that MSN or any other useless website provides real credit advice for those who'd like some "actual" tips on credit. Well stated these advice tips are for mentally challenged persons who Citibank decided to "pre-approve". Hell, I've even seen them extend credit to dead family members and pets! Credit could be a powerful tool in the right hands like these greedy corporate hogs and life sucking elitist parasites that suck you dry for everything your worth. Car dealers are the best example of these so called human beings. You could be sitting on top of a 740+ score and walk out with 13% simple interested loan for your Toyota Corolla that you'll be paying for 7 years.
10/27/2010 6:16 PM
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Sadly, this isn't the most retarded "article" I've seen on MSN. I think it's time to make Google my homepage. The little pictures they make with the letters are far more intelligent and interesting than the worthless junk on MSN.
10/27/2010 6:27 PM
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 Well we know big a$$ Kim Kardashian doesnt know to handle money or cards so whats new?
10/27/2010 7:21 PM
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Hey creditfail. I am a car dealer finance manager. Anyone with a 740 score does not have to use that dealer's financing. that person could easily get their own financing elsewhere. If perchance they did sign up at that ridiculous rate they could also re-finance the next day. In fact, in most cases I can get that person a better rate than they can get on their own. I do this every day. If you think you were burned by some car dealer (which I doubt) you paid a high rate because you deserved it. 
10/27/2010 9:30 PM
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At first reading I thought, great advice, MSN Sarcastic. But then I began to think, these practices are more common than we would like to think. Perhaps redundant for most, but you would be amazed at how many find it enlightening. Sad, but true.
10/27/2010 9:30 PM
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who writes these articles? Maybe an eight grader in a finance class? Basic, boring and most of all USELESS> Maybe I am a moron, because I fall for the tag, and am always disappointed.  MSN needs to get some new writers with valid info. UGH
10/27/2010 9:40 PM
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Is it a need, or want?
10/27/2010 9:43 PM
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After attempting for 12 tries to assign a user name that may be appropriate to catch a viewers attention to underscore msn's lack of attention and after being being rejected 12 times I would ask thise who feel disenchanted with msn to read on... Kudos to those individuals /comments who "get it' and suggest that msn doesn't and not only wastes white space but moreover is asleep when entities such as "dazzle smile" - (ring a bell to those that have been exploited by msn and that entity for  about a year and a half )have been mugging those on this website
10/27/2010 10:49 PM
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Hmm...maybe there aren't any "real tips" because credit cards aren't that confusing.  What's the point of bashing an article that contains all the info is should about the subject matter?  I mean, really, what more should it say? 

10/27/2010 11:07 PM
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Cancelling/closing your cards actually hurt your credit score, because that can mess with you debt ratio more. Example, you have 25k in credit card debt with a credit limit of 50K - 50%. If you close out an card with a 10K limit now you are looking at 62.5%. Think before you cancel.
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