Credit cards can lead the consumers into debt and bankruptcy for some, negatively impact the chances of buying house or car loans or loans in generally, and that he/she will have a hard times in finding a good job in the future with the history of having a bad credit score.
Are credit cards dangerous? In the past five years, the credit scores for those who own credit cards have been taking a toll. By using a credit card, people are more exposed to the higher possibility of geting into debt. Using a credit card puts a buyer at the risk of buying too much or using too much of their score. Cash in contrast to a credit card cannot physically show you how much monye you have or have spent. Not to mention that a credit card owner will go to the store and buy a pack of gum with their credit card they will owe more than the initial listed price of the candy bar. Why is this? Well, for example, if someone buys a piece of bottle of water for $1.20 and the credit card has a five percent interest then that person will actually be spending $1.26 to the company they are using the credit card with. This is because buying anything with a credit card allows the bank company to charge you interest on that item later. They then receive money since you are using their card. Credit card companies will often offer you benefits such as low interest or no fees for the first few months which is an effective marketing scheme. Even though you are getting these “free benfits” the companies will make their money back later by charging an increased interest on payments you have yet to pay for. Although using a credit card is beneficial to society for its convenience, credit cards also have many downfalls following closely behind such as overspending, getting into debt, and
Credit cards have become increasingly popular world-wide, making it easier to buy now and pay later but are they actually helping or hindering someone’s credit? “Maxed Out” by James D. Scurlock demonstrates how credit cards can hurt someone’s credit, while “Why Won’t Anyone give Me a Credit Card” by Kevin O’Donnell demonstrates how someone may have financial stability to pay off a credit card, but still be consistently denied one by the credit card companies. Owning credit cards is not the problem; the problem is being irresponsible with it.
Petty cash fund is not to be used for personal items, IOU’s, office party favors, lunches, taxi fare, or cashing checks etc.
Currently, I don’t have a credit card. All of my payments are made in cash of with my debit card. In the last lecture we learned that it is a good idea to get a credit card young so the credit can start building. Mr. Klassen says that he uses his card for the necessities that he has to buy anyway such as gas and groceries. I would like to implement that in my own spending habits once I get a credit card. I would keep my balances low by being responsible with how I use my card. In addition, I will start out with only one credit card. There is a lot of temptation to open up many cards with different companies, but with one card it is easier to keep track of your
Last but the most effective strategy is the CREDIT DEBT MANAGEMENT. Learn to set up your budget in the most appropriate way. Create a monthly or weekly plan of the expenditures and then proceed. Ignore the secondary elements; pay your key focus on the primary ones. If you have multiple credit cards, then start with the one, for which minimum amount of payment has to be paid. And, then proceed accordingly.
Consumers use credit cards for numerous reasons. Those reasons are: the earning of cash back, safety, points and frequent-flyer miles, universal acceptance, and to build credit (Investopedia.com). Credit cards can allow for cancelations a payment on a service that did not meet the expectations of the consumer, which is really beneficial. However, consumers own a few too many credit cards that all have different interest rates. The reason credit debt is so astronomical, is because consumers are paying the required minimum payment
Instead use cash for all your purchases. Any credit card purchases should be paid in full the same month of purchase. Do not carry a balance on your cards.
Credit debt is defined as results when a client of a credit card company purchases an item or service through the card system. The credit system was designed as a way to bring people out of bad conditions of living. Student loans for college and leasing a car are two really big credit loans. This affected every person who owns a credit card and struggles to pay it back. (Wolff-Mann, F.)
When dealing with credit cards, it is important to understand the potential for serious financial problems should you make any poor judgement calls when using them. For more information on credit cards and how to avoid falling prey to debt issues surrounding them, you might consider scheduling a consultation with one of our professional debt counselors here at
There is no reason to suffer from your bad credit, and if you are interested in getting a credit card, there is no reason that you should not do so. Also keep in mind that having a credit card and paying it in a timely fashion will be both convenient and help you in building up new credit.
Having a credit card can be a bittersweet experience, it gives a person access to money you wouldn’t otherwise have,but in the long run it can become a financial burden. Depending on the amount of money you have charged on the credit card paying it off can take some time, but there are several ways we can tactic the situation. The following calculations using the credit card and compound interest worksheet with the amount of $10,000.00 and an APR of 18%. Considering that the minimum payment is $250.00 it would take 5.13 years to pay off this credit card. In order to pay of the credit card in three years the payments would rise to $361.52. If the payments were raised even higher to $500.00 the credit card would be paid off in two years. With these calculations in mind, I will address some common questions or concerns that some people face when it comes to credit cards.
When you want to pay down your credit card balance there are a few factors to take into consideration. One is your current card's interest rate. The second factor is the balance you have, and third is
Many people are finding themselves in the situation of having multiple credit cards with thousands of dollars of accumulated debt. If you are paying on multiple credit cards, develop a strategy. Set aside the amount of money you can afford to pay for credit card debt each month. Divide the amount by the number of credit cards, putting the largest amount towards the card with the lowest balance. Once you have paid one credit card off, dedicate the largest amount of money to the card with the next lowest balance.
Credit cards serve as one of the most useful methods of managing ones monthly finances, getting cash back or rewards for their spending and spreading the cost of big payments. However, there are even some downsides of using credit cards. The biggest downside is the payment that gets accrued when an individual fails to pay his or her balance off in full every month. This results in the credit card becoming costlier. Withdrawing money from a credit card can be an expensive affair and therefore it should be completely avoided until circumstances force you to do so. So, if are doubtful and wonder can you withdraw money from a credit card, then the answer is always a yes but it is expensive and therefore needs to be avoided.