Credit Card Hazards That Can Cripple Your Finances
You are pre-approved! Every time I check my mail there is at
least one or two pre-approved credit card applications. You get
them too, I’m sure. You can even have terrible credit and they
still continue to flood your mailbox. And if you just filed
bankruptcy you will get more of them than you know what to do
Credit card debt is so easy to get into–over and over again.
Most people don’t feel like they are spending real money until
the bill comes, and then it’s too late. The credit card
companies know how to make it very tempting to fall back on any
good habits we’ve created and just spend away. It’s hard to get
away from, but we have to resist temptation.
When establishing good credit, one of the things we’re told to
do is to get a credit card and then use it to spend wisely.
Experts advise us to pay our bills on time and not to exceed the
credit limit. However, no one really talks to us when we get
that first card about how easily and quickly we hit that limit,
or how easy it is to miss that first monthly payment. Once you
get behind, it can be really hard to catch up. Oftentimes,
credit cards come with introductory interest rates that are
nothing or very low. But many times, those rates soon change and
you can find yourself with a full balance on your card with an
18 or 20 percent interest rate! That interest rate can then put
you over your limit, if your not paying at least the minimum
payment, now making you susceptible to over-the-limit fees.
Before you know it, you are getting bad reports on your credit
reports for credit card debt on a card that you haven’t even had
Unfortunately, when times are hard, abusing credit cards is all
too easy. When the economy is bad and cash is tight, it is all
too easy to put your daily living expenses on your credit cards.
If there is any kind of pattern like this in your credit card
spending, it can build huge credit card debt pretty quickly. If
you are not making your credit card payments, the credit card
companies do inquiries to verify your address or other
information. Every time they make an inquiry on your credit
report, it makes you look like even more of a high risk, further
worsening your credit history. All the credit card debt on your
report, even if some of it is good, can make you look high risk
for car loans or mortgages – especially if any of those cards
hold high balances. Even worse, that bad credit report can keep
you from renting an apartment or getting a job that requires a
So keep in mind, as tempting as it may be to pay with a credit
card, choose the “debit” option next time. It’s normal to risk
it all when times are tough, but doing so creates more problems
later that can take you years to fix. Credit card debt has long
term risks, but if you use credit cards wisely, you can build
credit that brings rewards instead.
About the author:
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http://www.my-credit-report.info This article is copyright
2005, but can be freely reprinted, as long as no changes are