Credit cards have been around for years and still they cause problems all over the world. You would think by now that the credit card companies could have worked out whether a person is eligible to have one. No that is the point they are chasing the dollar factor. They do not care if the person can afford the amount they lend them or not.
They are interested in making money at any expense. If the lender cannot manage or pay the debts back and lose their home or farm through either bad credit management or unforeseeable circumstances they are not interested. It is criminal what they do.
There was an instance where one company sent a credit application form to a twelve year old. Luckily the parents were shown the forms before any harm could be done.
Anyone can and often will have a credit card at some stage in their lives. In some instances many people should never ever be given one at all, because they have no idea on how to treat or respect any type of credit. They are unable to comprehend how a credit card can and will destroy their lives if not handled right.
You see instances of businesses offering buy now no interest for eighteen months. How can people be so gullible? Sure, they do not have to pay interest as long as they pay it before the eighteen months. What happens if they do not, that is the problem. They will probably be paying up to thirty percent interest until it is paid. Often by the time the article is paid for it will cost them more than it was worth in the beginning.
No one wants to max their credit card out and not be able to pay it back. If you cannot afford to pay the debts back then do not acumulate a debt in the first place. Become a debt free person and you will be a mile in front.
Advantages of having a credit card
The advantage of owing a credit card is to enable you to purchase items that you could not normally buy. Things that have been reduced which will save you money. This does not mean that you can go and spend thousands of dollars that you have no hope of paying back within the time limit with no extra charges. That will never happen and you will never be debt free.
Businesses- Credit cards can be advantageous for a business, as they can claim the expenses back from taxation. Most companies use them for buying equipment, parts and fuel expenses. This is quicker and easier than waiting for cheques to be cleared.
Safety – It is a lot safer to carry a plastic credit card than to have a wallet full of cash. Especially if someone happens to see you open your wallet and get ideas of you being a soft target for a mugging. At least if you use the card, they cannot get anything. Make sure you never write your pin number down and keep it with the card as without your pin number in the case of stolen wallets they cannot access your account.
Another important thing is to make sure you keep them safe in a wallet. This will prevent them from bending and buckling so they will work better.
Good credit rating- This is a great way to obtain a good credit history, as long as you pay it back before the due date. Overdue payments will not help your credit rating and will cost you more in overdue expenses.
Paying online – Credit cards are great to make payments of accounts and purchases online. It is much easier than driving around in the car using up fuel to pay them. You still need to be careful, and be wary of those capable of stealing your information. Never give passwords to anyone or write them down, always remember them.
Holidays and Overseas Travel- This is the beauty of credit cards, it allows you to book your accommodation, or pay for meals at restaurants and bars. Many of these cards offer benefits and points for cheaper travel and other reward programs.
Mechanical Breakdowns- If you breakdown it is so simple to pay for the repairs on the spot without having to go to the bank (if it is open) without any hassles.
Record Keeping- This a good way of keeping up to date with your spending habits. There will be a record of everything you have bought and paid for, whether it is the power bill or a night out on the town. This is great even for the person starting a new business venture, they will know at a glance whether they have paid their debts or not.
Paypal Payment protection- Credit cards payments are protected when using PayPal. This is the best and safest way of paying for anything online. It is also a great way for companies to pay you moneys earnt like writing for infobarrel.
Disadvantages of having a credit card
Late payment expenses- Read the fine print, when applying for a credit card. Late payments can be very expensive as you will receive extra charges.
Minimum payment- Beware, minimum payments are not good, they cost you money. In fact you will probably end up paying more in the end than what the item originally cost you. Always pay off as much as you can every month or fortnight.
Dangers involved- You may not be able to control the amount you spend. This happens because you may see something really cheap and because you have the card with you; it is so simple to purchase the article thinking you are saving money as it was on special. This leads to financial difficulty and is often the cause of people losing their homes, cars, and can even cost their marriage.
Annual Fees- People forget that on top of the normal fees, there is an annual charge for most credit cards which add to the cost of buying on credit. Some cards also charge transactions fees for certain purchases. You need to read the fine print and search for the one that suits your needs the best.
In conclusion use cash
Credit cards can be terrific if managed with care and in the correct way. If you are one of those people that cannot manage their finances then definitely do not have one. If you do have one and are behind in your repayments then get rid of it, cut it up. So you will not be tempted again. Then pay it off as quick as possible before you get into more trouble.
You need to be responsible when using any type of credit. A personal loan would be a much safer way of borrowing money than using credit cards, and it could be cheaper in the long run as well.
Another way of managing your money would be to draw out a nominated amount of cash for the week and do not spend more than that amount.
Credit cards Advantages and Disadvantages need to be considered carefully. Be sensible weigh up the pros and cons and decide whether it is really necessary for you to take the risk of having one. Instead of having a credit card, save everything you can and put the money into a savings account and buy the things you want with cash, then you will be debt free