Rules of thumb for dealing with high-interest credit cards

People who want a major charge card to establish credit or redeem a tainted financial history should brace for sticker shock.

If you are applying for credit in your name for the first time, or you had good credit but fell behind, there are plenty of lenders eager to do business with you. But the costs are sobering.

The good news is that even cards with high interest rates and fees can help you reach your financial goals, if you play them right.

The key is to use it as a charge card rather than a credit card, but you'll need tremendous self-discipline. With high interest rates you never want to carry a balance. Use it for small stuff and get the full payment in at least five days early. After a period, your credit rating will start to improve -- and so will the better credit options.

Even people who don't qualify for credit cards with lower interest rates should shop around and compare.

Check out these strategies for using high-interest rate credit cards to your advantage.

• Never carry a balance. Use the card to charge items that can be paid off in full before the grace period ends.
• Mail payments so that they arrive five days early. When payments are late, default interest rates kick in, making it harder to pay off debt.
• After six months of on-time payments, check to make sure the lender is providing the credit reporting agencies with that information. Some financial institutions keep good information to themselves so you won't get competing card offers.
• After one year of on-time payments, ask the issuer to give you a better interest rate. Lenders won't make that offer; it's up to the customer to request it.
• If a card issuer won't cut your rate after a year of good behavior, close the account and find another deal.
• If you aren't sure you can handle a line of credit, obtain a secured card.
• If you need quick access to cash for an emergency, consider a short-term personal loan instead of a credit card.