These days, people are a little more concerned with saving money than spending money via credit cards…this is a VERY good thing…but those credit cards are how some people got in trouble with money in the first place. Well, in spite of the good reasons people like to give and think they have for having credit cards, I cannot think of ANY good reasons to have a credit card, if your finances are set up to protect you and help you in the future. So, why do people WANT credit cards? Because they WANT things…
Credit card companies let you use their credit, otherwise known as their money, in exchange for high Annual Percentage Rates and tricky terms and conditions. In reality, they want you to mess up and pay late. They want you to get the cash advance and hope you don’t notice that the cash advance APR is higher (in most cases) than your regular rate for purchases. Why? It’s their BUSINESS to make money off of you, and you don’t care, because they make it easy for you to get things! If you have $1000 in credit card debt at an interest rate of 12%, making payments of $25 (standard minimum payment on this much debt) a month, it will take you 51 months to pay that off!! That turns out to be $1275 total…and it just goes up from there. $10,000 in debt at 12% with a payment of $150 a month takes 110 months, or 9 1/2 YEARS to pay off. You will pay a total of $16,500 to the credit card company. I don’t think anyone should be happy with that arrangement. Wouldn’t it just be easier to save up for it?
Let’s face it…a lot of people in this country are materialistic. The “keeping up with the Joneses” mentality that all of us have succumb to at some point in time keeps us begging for more credit from the credit card gods. We want things…handbags, tools, shoes, HOUSES (hello people who bought more house than they could afford) and who knows what else. So I ask again…why do you want a credit card? Well, if you can’t say that you pay off your credit card EVERY month, and if you can’t say that you have an emergency fund and don’t NEED the credit card, then you shouldn’t have one. Using credit cards because you can’t afford to pay cash for what you want is a bad idea. You should save up to buy items that are not in your budget. Credit cards are NOT a supplemental income. They are not a way for you to expand your lifestyle, and when a person uses credit cards as supplemental income it almost always comes back to haunt them.
Tags: Credit Cards, Debt, Minimum Payments
