Today credit cards are all the rage. Everyone has one. No one pays cash for anything anymore. Some people don’t even carry cash. Charging is the way to go. And the result? A lot of people drowning in credit card debt. The solution? Try using cash for a change.
When you apply for a credit card be sure you read carefully the terms and conditions. You might start out with an incredible rate. But don’t miss or payment or make a late payment. You might find that they double or even triple that rate of interest. Buys made on a credit card that has interest rates nearing 30% are going to cost you a small fortune down the road.
Credit is not all terrible. We all need credit at one time or another and you can’t establish excellent credit if you never use credit for anything. If you always pay cash how will creditors know that you are a excellent risk? So there is a balance to be had.
But, compounding interest makes credit card use a perilous game. You need to be careful because before you know you it can rack up huge debts on multiple credit cards and they will just keep mounding month to month. It becomes a vicious cycle.
It may seem simple to buy everything on credit. But if you are buying things that will no longer have when it comes time to pay for the buy what sense does that make. How ridiculous if you charged a meal on your credit card three months ago and you are still paying on it, plus interest. That food has been long gone and you are still in debt because of it.
An emergency card is excellent to have. It is very useful when the unexpected happens and there is no disposable cash to take care of it. So it is not necessary to ban all credit card use.
So pick the one with the lowest interest rate, pay the others off and cut them up. Close your accounts and don’t let the credit card companies talk you out of it. They are the only ones that stand to gain from you having multiple credit cards and mountains of credit card debt.
There is a lot to be said for the ancient fashion way of doing things. If you want something pay cash for it. If you don’t have the cash save up until you do have it. If you can’t save up enough for it you probably didn’t need it anyway. There would be a lot less people in debt if everyone lived by those simple rules.