Credit Cards

Credit cards are a much loved accessory in the easy spending world of modern society but we have been misusing them. That insignificant piece of plastic has got countless people into serious financial trouble. The old fashioned system of pulling a wad of bank notes from your pocket and paying cash for things is long gone. Now we just book up the plastic.

We do not just have one card either, many of us have a fistful of them. All with debt owing on them some with huge debt on them. In fact some clever people manage to juggle these cards. They manipulate them so that one pays off another card and another card pays off the first one. On it goes but of course this is totally unsustainable.

The problem here is that it is way too easy to lose track of your finances. In the old days you took out the money you needed and could afford to spend and that was all you spent. Now of course you buy on credit and this accumulates and debt accelerates with the horrendous interest rates the credit card companies charge.

There is a better way to use credit cards and avoid credit card debt but they need to be used with restraint. That is a very old fashioned idea. Actually used properly cards are safer and more convenient than cash. However, you need to figure out your financial limits before you go out spending any money. Never spend any more than you can afford to pay back at the end of each month.

In fact there are advantages to using credit cards. You can make use of their money right up to their minimum payment date and keep your cash in the bank earning interest. Additionally most credit card companies run rewards schemes related to your card spending. So that is nice that they give you rewards and let you earn bank interest but their motives are all selfish.

They are positively willing you to overspend and enmesh you in their trap of high interest rates. Once in that trap you can expect to get pulled in deeper and deeper. So be warned, use your credit cards wisely and take those companies for all they will give you. Just remember to always pay off your credit cards completely every month. There must be no exemptions to this rule because it is just too easy to fall into debt.

Credit cards are kind of a drag once you get over the novelty of having one or more. By that time you are at your credit limit. Now instead of spending at a shopping spree, you are struggling to make the minimum payments every month.

Now you are also wondering why the balance keeps going up even though you are not using the credit cards to buy anything anymore. Not that you do not want to buy stuff with your credit cards, but when you try they come up declined.

The reason your balance is getting bigger is because you are being charged an exorbitant interest rate on your credit card balance, and then interest on the interest, plus any of the various fees you might be getting charged. You are in debt and you need to get out!

High credit card balances are bad because you are paying outgoing interest that puts a hole in your finances. What you should have is incoming interest to build your savings. This is hard to do when you do not have any savings, and harder to do when debt is giving your money an outflow rather than an inflow.

Ever wonder why the poor get poorer while the rich keep getting richer. It is because the rich are collecting interest on the money they have and the poor are paying interest on the money they do not have. The first thing you have to do to move from poor to rich is to stop having to pay interest. Scrimp, budget, and sacrifice. Anything you can do to pay down on your credit cards to get you out of the downward spiral.

Once you get them paid, close the accounts because we have an almost certain inevitable tendency to use our full credit balances when we have them available. That is why credit card debt is so common, and why credit card companies are making such good money. Do not let them make it from you anymore. Kill your credit cards! If you need to use credit cards to make payments, banks and credit unions now have debit-charge cards available that are linked to checking accounts so that you do not have to borrow money or get charged interest to pay bills.

Do this and you will have extra money available every month that you can spend rather than paying down on a recurring credit card bill that gives you no benefit. You can also decide to save that money in an interest bearing account. Having savings will restore your peace of mind with the feeling of security rather than your previous stress caused by debt.

Once you get in the habit of not borrowing money and saving money instead, you will have that incoming interest which will give you a brighter future. First you have to get out of the dreary dilemma of debt, and unless you have borrowed from or gambled with the mob, credit cards are the worst kind.