The 411 On Credit Cards
Credit cards are something that was an unknown entity many years ago; today they are in almost everyone’s pockets. They are used daily for millions of purchases throughout the world for every type of item or accommodations imaginable. It is a very convenient way to make purchases without having to carry a large amount of money around. Young and old alike use these cards in almost every culture in the world.
Unfortunately, the idea of having something at one’s fingertips that can allow one to obtain their heart’s desire cannot be handled by some people. As a result, they end up thousands of dollars in debt, at a high interest rate, and a limited income. These cards have caused a large number of bankruptcy claims, which ruins a person’s credit when they try to buy a necessity such as a home.
For years, the credit card companies have had carte blanche in assessing various charges against their customers including a high interest rate. Just recently, the government passed some rules to try to control this abuse of the system. Unfortunately, there are still loopholes, which, after a time, allow the companies to charge as much interest, as the customer will allow before saying “enough”!
While the congress tried to protect consumers there are still two avenues open to the credit card companies. The monthly interest rates can still be increased at their discretion and there is no restriction of the types of fees they can charge. Testimony before the committee, by cardholders, revealed many uncalled for abuses such as ruining their credit when they tried to change companies and increasing interest rates for no reason. Many other problems were revealed which had an adverse affect on their lives.
Many people have had their credit record ruined because of one of these cards. This loss of a good credit record can ruin any attempt to purchase things like a car or home or even get hospital or other credit. A person needs to sit down and really determine how much of a dollar is going for an interest rate for which you get nothing in return. When purchasing with a card the company gets a fee from the retailer as well as interest from the holder. In this manner, they are getting paid twice.
A bad credit card report can ruin your credit score and ruin any attempt you might make to make important purchases. High interest rates reduce the value of your dollar as, with 30% interest, you only have 70 cents left. When you are making a large payment this can cut your money for other expenses considerably.
To some people having a credit card is like having a key to the bank. There is no end to the possibilities of purchasing anything desired with no questions asked. This leads to disaster and every effort should be made to avoid this problem.
Many people think themselves very smart on financial matters. They will argue with a utility company or other entity over a few dollars and feel very satisfied when they come out ahead. Yet, they will run up hundreds of dollars on a credit card, then look at the bill on the end of the month, and wonder what happened. When a card winds up with thousands of dollars balance and no way to pay it many people can only seek bankruptcy. This is a huge blemish on one’s credit record and causes personal embarrassment as well. Training oneself to respect the power and the faults of a credit card are
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