Credit cards offer convenience. It is because of that, that they are preferred by many people and are used on so many occasions. Unless you learn how to use credit cards properly though, in all probability you are going to get into serious debt.
How credit card use can lead you to financial ruin
1. Use credit cards all the time
Credit cards may offer convenience, but that will no longer be the case , if you tend to use them for every purchase or every bill you pay. Credit cards should be used only when cash is not a payment option. That means that they should be used when you want to make an online purchase where cash is not accepted, or a big purchase (such as paying for a new fridge, or computer) where paying in full is not possible.
2.Withdraw money from one credit card to pay for another
It often happens to people who cannot pay a credit card bill to withdraw money from another credit card to pay off that credit bill. That may solve the problem temporarily, but long term speaking, it is going to increase your debt, as you will have to pay more money for both credit cards. If you want to borrow money, it is best to ask a friend or a relative. Selling some used items on Ebay may also solve the problem quickly, without having to borrow money from anyone.
3. Pay after due date
When paying for your credit cards after due date, you are charged with extra fees, which increase your debt. Collection agencies will begin calling you on a daily basis, asking you to take care of your debt as soon as possible. If your good reputation as a customer is ruined, then your application for a new loan or credit card may be rejected by the banks. No matter how serious your financial problems are, it is absolutely necessary to learn to pay your credit card bills before due date. If it helps you, try to slash your payment. Divide the amount in two payments. That way it will be easier for you to pay your debt, as you will be given more time to collect the whole amount. Furthermore, by making two monthly payments instead of one, you will also manage to lower the interest over time.
4. Pay only for the minimum payment
While it is not always possible to pay more than the minimum monthly payment, it is important to try to pay more than that, as often as you can. Even a few more dollars each month will make a difference. If you pay only for the minimum payment all the time, you essentially pay just for the interest, not for the balance. That means that it will take you twice the time to pay off your credit card debt.
When used wisely, credit cards can indeed make your life easier and more comfortable. To accomplish that, you need to remember that you should be the one on the driver’s seat, not your credit cards.
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