Why Credit Cards are a Bad Idea
Credit cards are just so convenient, aren't they? There's no need to carry any money with you ever again: you can just take one with you to the shop and pay the exact amount just by handing it over. If you haven't been paid yet, then you don't need to worry, because the money will still be there.
When you shop on the Internet or over the phone, it's the only good way to do it - what else are you going to do, post a cheque? Like anything convenient, though, credit cards have a flip side - in fact, they have lots.
Can You Keep Track?
When you walk into that shop and hand over the card, the money is taken from the card, and the card goes back into your wallet. You still have all the things you started with - there's no less money in your purse or wallet to remind you of what you've spent.
Everyone has a tendency to underestimate what they spend, and smaller amounts can add up quickly on a credit card without you even noticing. It's like taking the way phone bills work and applying it to everything you buy - and that can't be a good idea.
Money For Nothing.
Using credit cards is a great way of losing a percentage of your income to a credit card company in exchange for nothing. The moment you run a balance, you're paying them interest. Not only that, but you're paying your credit card bill as soon as you get your wages, so you don't have the chance to earn any interest on them from your bank. When you think about it, you're losing out twice over - and for what?
Designed to Keep You in Debt.
Your credit cards are trying to keep you using them and paying interest. You will find it very difficult to pay off all your credit cards once you have them. The company will do everything they can to stop you paying before you've paid them lots of interest. The more debt you show you can pay back, the more they'll try to offer you, until they get you to the point where you can't pay.
The Lie in the Name.
Credit cards are called credit cards to avoid saying what they really are: debt! You will do much better in all things connected to credit cards if you always remember this simple mantra: credit cards are debt cards. Use the word debt as often as you can whenever you talk about credit cards.
But Sometimes You Can't Avoid Them.
When you need money in an emergency and you just don't have any, there's no doubting that credit cards can be useful. They are also a very useful way of proving to credit rating agencies that you can handle debt, and this will be taken into consideration when you apply for car loans or a mortgage.
Just remember that whenever you handle credit cards, you're playing with fire. Do everything you can to keep your use of them to a minimum, and you'll have a much better financial life.
Ken Austin is the webmaster at Debt Consolidation Solutions and Credit Relief Solutions
MORE RESOURCES:
 Calgary Herald | Bush: US will work with partners on credit crisis The Associated Press - WASHINGTON (AP) — President Bush says world's wealthiest industrial countries will work together to attack the credit crisis spreading around the globe. ... G7 seeks to halt global crisis Bush says financial crisis needs coordinated response US pleads for patience in crisis repair efforts |
 Boston Globe | Global leaders seek answer to credit crisis San Francisco Chronicle, USA - At the same time, loan markets everywhere remained broken, especially the critical wholesale credit markets, in which financial institutions lend each other ... Video: Bernanke: More Economic Pain Ahead TREASURIES-Surge in Europe as shares skid on credit woes Stocks down despite government moves to free up credit |
 The Associated Press | US will work with partners on credit crisis: Bush CBC.ca, Canada - It was the 21st time in 26 days that the president has spoken publicly about the credit crisis gripping financial markets and dragging down stock markets. ... Meeting G7, Bush Vows World Economic Fix |
 Calgary Herald | High anxiety rules Wall Street as global credit crisis deepens Emirates Business 24/7, United Arab Emirates - High anxiety on Wall Street will not subside this week as the deepening credit crunch pushes the international economy into recession and corporate profits ... Video: Stocks Fluctuate After Fed Corporate Debt Plan Easy credit and financial crisis G-7: We're Working On It |
 New York Times | Lehman Credit-Default Swap Payout Could Climb as High as $365 Billion Washington Post, United States - By Heather Landy NEW YORK, Oct. 10 -- In what may shape up to be the most expensive payout ever in the credit-default swap market, sellers of insurance ... STOP FINANCIAL WMD'S: Credit Default Swaps Insurance on Lehman Debt Is the Industry’s Next Test Lehman Credit-Swap Auction Sets Payout of 91.38 Cents (Update1) |
Is my credit union safe? Los Angeles Times, CA - By E. Scott Reckard, Los Angeles Times Staff Writer The government-run National Credit Union Share Insurance Fund insures most deposits at credit unions, ... Got Your Money in a Credit Union? You Too Are Safe In tumultuous financial times, credit unions might be an option to ... LETTER: Your money is safe with credit unions |
 Los Angeles Times | Fears Grow That Tight Credit Could Crush GM, Ford NPR - Standard & Poor's downgraded the credit of both companies and their financing arms this week. AFP/Getty Images Ford F-150 trucks sit at a dealership in ... Video: Money Minute: GM, GE, Oil GM, Ford too big to fail? CREDIT WATCH HITS GM, FORD |
Financial troubles spread to credit unions Los Angeles Times, CA - By E. Scott Reckard, Los Angeles Times Staff Writer It's not just giant banks on the brink these days: Losses are clobbering nonprofit credit unions that ... |
 Citizen | Credit Crisis Collapse What Happens Next? The Market Oracle, UK - To not take actions to stem the credit crisis would be that major policy mistake which would compound all the other mistakes. I think everyone knows the ... Regional financial experts focus on lending; say credit crunch is ... Market news this week for strong stomachs You have some input on interest rates |
 Voice of America | IMF endorses G7 plan to fight global credit crisis CTV.ca, Canada - The International Monetary Fund is backing a plan by Canada and the other G7 countries to fight the worldwide credit crisis, which continues to play havoc ... Video: IMF: Timing right for G7 Credit CRISIS ALERT Press demands some G7 credit crunch punch |
How did a Thief get my Name? Don't be a Victim of Identity Theft
How do these people get my name? If you have a credit card, your name is sold to third parties, if you do not want this to happen, you must contact your credit card companies to inform them that you do not want your information sold. Check the privacy notice that comes with your bill.
Always Avoid Payment Holidays
Once you've been paying off a credit card for a while, you might be offered a 'payment holiday'. You'll get a letter, saying that since the company knows it's difficult for some families around Christmas (or whatever other excuse they think up), they're offering you a month off from paying, as a 'special present'.
Why Does Your Credit Card Rate Keep Going Up?
Have your read your credit card contract through completely? Do you know when it is okay for your creditor to raise your interest rates? If you are not sure about how and when your rates can be affected over the life of your contract you should take a few minutes to read your contract thoroughly from beginning to end.Creditors must have clauses in their contracts that give them the right to change your interest rates.
Free Credit Reports Now Available From the FTC
The Federal Trade Commission (FTC) has set up a new website (www.AnnualCreditReport.
Using Credit Cards Wisely
"I think money was stolen from my card" or "I might have blocked my card in the ATM" - these are frequent problems that bank customer-support officers usually hear from agitated clients. Incorrect use of credit cards or wrong interpretations of their functions are frequent even after tens of years of credit-card extensive use.
Credit Report - Watch Out for Parking Tickets
The economic downturn of the last five years has affected millions of Americans, but it has also affected the budgets of states, cities and counties. With limited tax dollars with which to work, various government entities have had to try to stretch their budgets to allow them to continue to function.
How to Get Credit Reporting Agencies to Help You
The process of clearing credit can be laborious and frustrating. Understanding your rights empowers you and saves you time and effort.
Credit Cards: What is the Universal Default Clause?
Most people who carry major credit cards are well aware that the interest rates associated with them tend to be higher than for other types of lending, such as home or auto loans. Anyone who has paid their credit card bill late more than once or twice is also aware that doing so may cause the interest rate on their card to go up - sometimes by quite a lot.
Commercial Collections And Credit Granting
It is estimated that billions of dollars in delinquent commercial credit is currently being carried on the books of both American and international businesses. This figure changes as our economy grows or contracts.
How You Can Help Prevent Identity Theft
How can I prevent Identity theft from happening to me? Never leave your receipt or slip in the ATM or gas pump. Pay attention to your habits, lock up or organize and file your bills, and bank statements.
Maximizing Credit Card Rewards
In their quest to get you to sign up for their credit card, banks and financial institutions are coming up with more and higher incentives to entice you. Frequent flyer miles gave way to gas miles which opened the door for cash rebates and reward points to be used at 'our fine member merchants'.
Addressing Bad Credit Card Debt
Spending HabitsSo you've just got your credit card. The first thing you need to be wary about is that a credit card is very easy to use - afterall you can shop in stores, via catalogs and online with your credit card.
Will Inquiries Lower Your Credit Score?
What are inquiries?When you apply for credit the creditor or lender checks your credit report to verify that you qualify for the credit or loan you are applying for. The "inquiry" is then reported to the credit bureaus and shows up on your credit report.
Credit Report Secrets: Do You Know What They Reveal?
If you've ever applied for a credit card or loan, you've probably had your credit report reviewed by the lender. Your credit report has a huge impact on your financial future, so it's well worth your time to be sure that you understand what your credit report says about you.
Some Truth About Credit
Credit is currently and has been historically an integral component of our economy. Credit contribute a person's net worth, and financial power.
5 Steps You Can Take to Get Paid!
There are always some companies that have past due invoices and can't seem to get them paid. They might be quietly waiting to get paid not wanting to contact the client for fear of appearing "desperate".
Rebuild & Keep Good Credit Ratings by Understanding Your Credit Cards
Secured Credit Card is similar to a prepaid credit card since the funds you are using are actually yours and not the issuer of the credit card. Generally people who apply for secured credit card or prepaid credit card are people with poor credit or unemployed.
Your Credit Card May Be Costing More Than You Think!
Do you know what your credit card is truly costing you? Many people assume that they do, but aren't familiar with the hidden fees that many credit card companies are charging. In fact, if you don't keep close tabs on your credit card, you may end up paying hundreds of extra dollars per year-without ever really knowing it!And if you're trying to budget your money, those hidden fees can add up!Let's take a look at some of the most common credit card fees, and then talk about how you can avoid them.
Credit Cards: Pros and Cons
Sure, there are a lot of problems with credit cards, but there are a lot of good things attached to them as well. For instance, if you have a small business, fleet credit cards can keep your books in order when you issue them to drivers of company vehicles for gas and automobile repairs.
How To Use Your Credit Cards Wisely
Are you one of the thousands pulling your hair out trying to figure out how you're going to pay your credit card bills? Using your credit cards wisely and sensibly will help you avoid financial problems and establish a strong credit rating, so here's some information to help you get your credit card problems under control.Credit cards are convenient for buying things now and paying later.