Prudent Credit Card Use - How to Avoid Credit Card Pitfalls
Seeing
people buying food or shopping clothes using credit cards has been
commonplace these days. The phrase "Charge it!" has become a favorite
expression of card users, and has been commonly heard in shops, dining
places, and elsewhere. The free will to just "charge it" is one of the main causes of credit card debt.
If you have a credit card, who is not tempted to want to use these credit cards for purchases? After all, the easy to use
sleekly-designed cards can be used to buy practically everything in
commercial establishments regardless of how much (or less) money does
one carry money in his wallet. Short of cash and hungry? No grocery
supplies? Going to a party but no money to buy that dress you've been
drooling for? No problem! Your good ol' credit can care of that for
you. No worries.
Credit Cards: Not Free Money
But
wait. A credit card spree may be fun, but that doesn't free you from
responsibilities in paying the expenses you incurred from using your
credit card. Credit cards, after all, are interest loans in disguise.
Rampant credit card use can result in excess credit card debt if you
are not careful. Then you will be faced on what you need to do to
eliminate the credit card debt.
Credit Card Facts
Typical credit cards ask for a number of charges, including:
A finance charge, which is an interest charge for the unpaid portion of your monthly bill;
An annual membership fee;
Or if you're paying after the deadline, there is also a late payment
fee which could have a higher interest rate.
In
fact, many credit-card holders face credit-related problems. Poor
purchasing decisions, lack of information on credit card fees, and
disregard for upcoming credit payments are among the reasons why many
credit-card users are often hard-pressed in paying their debts. Some
are not even able to pay for the actual purchases they made, just
barely managing to pay credit card company charges.
Before
you get drowned in a sea of debt and find yourself trying to eliminate
credit card debt, here are some tips to help you manage your
credit-related expenses:
Be credit smart. Applying for a credit card application means you are
ready to assume the responsibility for paying your credit. You and only
you - not your parents, spouse, or whoever - is responsible for that.
Use your credit cards wisely and sparingly. Remember: Paying goods and
services using credit cards are more expensive than using cash or
checks. Credit payments include interest and other fees. Use credit
cards as sparingly as possible. If you really need to use credit cards,
carry only the cards that you will actually use.
Use credit only if you are sure you can repay it fully at the end of the payment cycle. Paying your debt on a
credit card using another credit card does not count.
Avoid impulse shopping on your credit card.
Use credit for money emergency only.
Seek credit counseling as soon as you see financial problems on the horizon.
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