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OVERSPENDING
A credit card can lull you into a false sense of financial security. Here are a couple of ways to avoid disaster via indiscriminate spending. One, avoid junk offers that come along with your card statement in the mail. Remember that you are not obliged to buy anything. Two, many dealers offer discounts for payments done in cash. In such situations, the gains of paying by cash outweigh those of free credit.
DEBT TRAPS
Credit cards are to be used for convenience in buying and spending. So, use them within your means. The interest rates on the credit cards are very high if you don’t pay the dues but accumulate them. So if you don’t keep paying these dues, your credit cards may become hot listed and more than that you may even end up in a debt trap. So be choosy while you spend on the credit cards. Make sure that you can make the payments against the dues instead of accumulating them. If are an impulsive buyer, it is better to use a debit card rather than a credit card. If you need money, it is better to take personal loans from the banks and the institutions, which are cheaper than the interest on the credit card dues.
THE RED ALERT, YOU ARE IN TROUBLE WITH YOUR CARDS
Credit cards are handy if used prudently, but can be disastrous if overused. You won’t believe it but, in the West, one of the main reasons for marriages falling apart is huge outstanding debt balances on credit cards. You know you’re in trouble with your cards when:
• You start digging into your savings to pay old bills. It’s worse if you start using your card to withdraw cash to pay those bills.
• You delay paying the telephone and electricity bills to pay off the credit card bill.
• You start using your card in places you would earlier use cash --- at the petrol pump, or at the grocery store. |
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