Debt is a problem for a lot of people, and it often starts with misconceptions about smart ways to use credit ( a.k.a. credit myths.) The truth is, credit cards can be an effective tool, or your worst enemy. If you use credit cards within a spending limit that you can afford to pay back every month it can help with maintaining healthy credit or itemizing your spending. However, if you overspend and let outstanding balances linger, it can cost a bundle in interest charges.

The key is to find a balance when using your credit cards and it starts with knowing when and how to use your credit cards wisely.

Don’t fall for these credit myths

1) Credit cards can be used for daily cash flow.

Taking out cash advances can be a big mistake. Unlike regular credit card purchases, which offer an interest-free grace period (usually 21 days), cash advances start charging interest from the moment you take the cash. If you’re a little short one month, don’t take out a cash advance on your credit card. Skip a night out on the town or scrimp on your groceries. Do anything you can to avoid the credit myth that credit cards can be used for cash flow.

2) It’s a good idea to pay for college with credit.

Popular personal finance website Wise Bread says that although a higher education is a good reason to get into debt, charging thousands of dollars in college tuition on your credit card is a bad idea. Federal student loans are a better alternative. The interest rate is lower than credit cards and the repayment period is more flexible.

3) Your rent can be paid with credit.

For the same reason why charging tuition is a credit myth, it’s also a bad idea to pay your rent with a credit card. Your rent is a major monthly expense and can quickly add up to large outstanding balances if it’s not paid off at the end of the month. If you need budgeting assistance to make your monthly rent work, consult a professional, but continue paying rent with cash or a check instead of credit.

4) Use your credit card to cover monthly bills. This is one of those credit myths that many people are guilty of believing. If your income can’t cover your monthly expenses don’t use your credit card to cover the costs. If you don’t have the money now, you probably won’t have the money later and that leads to outstanding credit card balances. If your monthly bills are too much to handle then evaluate priorities, cut expenses and set a monthly spending budget.

This is one of those credit myths that many people are guilty of believing. If your income can’t cover your monthly expenses, don’t use your credit card to cover the costs. If you don’t have the money now, you probably won’t have the money later, and that leads to outstanding credit card balances. If your monthly bills are too much to handle then evaluate priorities, cut expenses and set a monthly spending budget.

5) Make other credit card payments with credit. This is one of those credit myths known as paying credit with credit. There is no sense in making your minimum monthly payment on one credit card with money from another credit card because it doesn’t help

This is one of those credit myths known as paying credit with credit. There is no sense in making your minimum monthly payment on one credit card with money from another credit card because it doesn’t help pay off your balances. The exception to this rule is a balance transfer. If one credit card offers a lower interest rate it makes sense to transfer the balance of another credit card to save on interest charges. This is only a good financial strategy if you pay off the outstanding balance as soon as possible. Otherwise, you’ll always be in debt and that’s not going to help you in the long run.

If you want to learn more about smart credit strategies contact one of our credit counslors today and we’ll help find a payoff plan that fits your lifestyle and budget.

This article was syndicated and originally appeared on the CESI Debt Solutions website.