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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:
Credit - Google News
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