Wednesday, June 06, 2007
My Take On Credit Cards
When I was young, a credit card was my goal. At the time, it was because I couldn't get one no matter what. Everybody was getting the cards in the mail. Now, you get the promos that state you are preapproved.
Frankly, I do not believe that credit cards are a good thing. When someone who is not doing the right thing with finances, gets a hold of a credit card they tend to not treat them right. They max the things out and then can't pay for them. In my case, years ago, I believed that the card I had was one of those monthly payment things but it was not. The company came back at me hard. I did not have the money and it was not long before they sent my account to a credit reporting agency. Having not learned a thing, another company gave me a credit card. It was maxed out and I was unable to pay it either. Same story. I have grown up since then but I still find them to be a danger to those who are not knowledgable about them, especially the interest rates at which they are set.
On the other hand, when someone does know what they are doing, it can be a blessing in an emergency. Credit cards are not the devil. They can be useful tools for those who are willing to have control of their lives and the finances.
Is it too easy to get credit which can cause debt? Most assuredly. It requires someone who will watch how they use the credit cards that they have aquired. No one needs more than a card or two. I have heard of families and couples who have 10-20 cards, all maxed out and they are in trouble financially. That does not work.
Now, if you must have a credit card, there are several out there that work really well. Some companies like you so much that they will give you a credit cards with cash back . Not bad. What they do is calculate how much you spent and use that amount to deduct a portion from your next month's balance. Of course, it does depend on how much you use the card but it can be a good deal if you are careful. In this case, you must pay the whole bill on the card each month so that charges do not eat up your savings.This type of card, the cash back credit card, is not suitable for those who owe money on credit cards or are in debt.
When you do try for a card or two, there is a site that will really be helpful because they compare the cards out there for you. This particular site is in the UK. Card Guide helps you through the sometimes confusing search for the best card out there suited to you. They are not all suited for everyone. Each has it's own good points and others that are not so hot. For those who have bad credit, do not despair, they have some for you. Use caution.
You need to look at what the interest rate is and how it is calculated. If it's calculated daily, then you need to see what it will cost you for that. By the way, the interest rates are different if you are transferring a balance from another card. They are for best customers and established ones. If you are getting a new card, the interest rates are much higher. If you are a first time customer and your credit is questionable, watch out! Those interest rates will be really high, probably at the maximum level possible which can be rather impressive. So watch for that. Do NOT go getting a credit card if you only want it to spend and max out the card. You will be in trouble by the first bill.
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