Remember the poll you participated a few days ago? Let’s take a quick peek at the results.
Though the numbers are small, it’s alarming to know that almost 23% is in debt big time with your credit card company, that’s really not a healthy figure. If you’re looking at how to grow your money, you’ll agree with me that you have to get yourself OUT of debt before you can grow. Kudos to the other 26% who keeps themselves in a clean sheet!
Now I’m sure many of you will dispute with me on credit card being a menace than a tool that you can conveniently call it your own, let’s face some real facts,
You Don’t Really Need To Pay To Use A Credit Card
Annual subscriptions? A typical card charges like $150 - $200 a year for you to use their card service, but this can be easily offset by either rewards system or just by giving their customer service a call to ask for a waiver (I do that all the time since I utilize my card fully and rather use my reward points to redeem for something useful)
The only way for a credit card firm to make money off you is from vendors who’re paying to use their merchandising service and you allowing your bill to be due for interest and late charges. And that’s hefty.
You Can Accumulate Your Spendings and Monitor with your Bill
How many of you are guilty on spending cash by simply withdrawing money. I know I’m one of them; and it seems to me that the more cash stays in the wallet, the faster your bank account goes down the hill.
Your bill actually allows you to track your spending on your card. And if you worry too much about busting your credit card, keep all the invoices of your spendings for the month, and calculate the totals whenever you reach home. There’s an excuse to keep them since there are sensitive card data on your bill. You could just keep the bills and tie them up with a band, and by the end of the month when your bill reaches you, tally with your invoices and shred them away.
ps. Take note of your Internet spendings with your card though. I can see this as one of the reason why people can’t control their spendings since there’s so much temptation on e-shops nowadays.
Acing Your Credit Bureau Ratings
If you have been paying regularly your credit card bill, the central credit bureau that your credit card reports to recognizes you as a good paymaster; which simply means you’ll get to enjoy benefits as an individual who knows how to manage your finances properly and getting any different kind of credit loans or mortgages approval would be much, much easier.
A Travel Tool Assurance
This is one of the few main reasons why people just carry a credit card around (Visa/ Mastercard). You’ll usually just give your credit card company a call and increase your credit limit before heading to a destination for work or holidays, and change lesser of your foreign currency so you won’t have to carry a wad of cash around to avoid being a theft victim.
If anything happens to your card, a call is all you need to do to cancel it and protect your credit from being misappropriated.
Reaping Rewards For Using A Card
If you’re a strong believer in reaping rewards of using a card, you’d probably do this. Anything that you can charge to your card with your normal necessities in life, you’d probably do it. Earn miles or bonus points for whatever that you charge to your card and get some rewards out of it; Be it few free movie tickets, shopping vouchers and some even rebate you cash as part of their dividend.
I charge my phone, utility and everything I could to my card and also use it for groceries purchase as well as gas bills. I’m talking about necessities here, it’s to your advantage. Another point to take note, never draw cash from your credit card unless for emergencies (You’ll be charged interest when you withdraw cash right away, totally different from charging your cards to vendors for groceries, bills, gas etc where you have a due date to settle before they start charging you interest for the outstanding)
Buyer Protection
I only recently learned that some debit cards allow you to have some protection when you’re purchasing things online (thanks to Don). Note, most debit cards don’t; As such, when you actually leak your debit card information to the wrong hands, your bank account would probably be wiped out.
Most credit card companies allows a limit protection of how much you can lose to fraud or scams and allow you to dispute against fraud of such cases.
For Example,
A fraud got hold of all your card information including the CVV/CVV2 numbers (at the back of your card for Visa, Amex is in front) and made illegal purchases. You got a shock of your life when you can’t use the card or saw the invoice on the new month.
Fear not, dispute the amount and prove that you aren’t the one doing it; Here’s a VERY GOOD PDF of the guidelines and the disputes you can make as a consumer from Consumerlaw, please right-click, Save-As and download it)
This is something that cash or debit card doesn’t offer.
So Is Credit Card Still a Foe For You?
I’d credit personal spending discipline as the most important factor here on whether credit card is a menace. If you have a budget of your spendings, stick to it and never ever fall back to spending on luxuries that you’re not suppose to. Here’s a very interesting discussion on the Tao Of Making Money (TOMM) that I came across whilst Stumbling that you might be interested to check on the responses. Simply cool. I’ll stick to the stand of some at TOMM that it’s simply bad spending habits and personal denial that people blames the cards for getting them into debts.
Watch what you spend on and never get yourself into debt, you will see your credit card is a very blissed asset. We’ll look at how can we tackle credit card debt issues next, avenues which are realistic and probably the first few steps you should take to get out of debt.
ps. Congratulations to Leo, Zen Habits who got completely out of debt, I’m sure it’s a whole different feeling altogether! 
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credit cards are a lie and a fraud and should be banned.
boycott credit cards. it’s a game that’s tilted to benefit those who need the perks the least.
the already wealthy. think of a credit card in the same way you would regard some one who offered you crack.
credit cards belong in the garbage.
credit cards are a lie and a fraud and should be banned.
boycott credit cards. it’s a game that’s tilted to benefit those who need the perks the least.
the already wealthy. think of a credit card in the same way you would regard some one who offered you crack.
credit cards belong in the garbage.
credit cards are a lie and a fraud and should be banned.
boycott credit cards. it’s a game that’s tilted to benefit those who need the perks the least.
the already wealthy. think of a credit card in the same way you would regard some one who offered you crack.
credit cards belong in the garbage.
In today’s world, most of the people are using their credit cards for special purchases as well as usual daily purchases because the credit card issuers are offering a high level of flexibility and security to the customers.
Credits cards are very useful and handy. Moreover, you don’t need to worry about burglary, theft or carrying huge amount of money. However, you need to use it and repay it responsibly and sensibly in order to make the most of your credit card.
Always get rid of abused credit cards because they will create massive financial problems in future for it’s high level of debt. You are advised to follow some valuable tips that are given below due to make the most functional use of your credit card along with diminishing the risk of getting into unmanageable debt level.
• Always try to repay the full outstanding during the period of your payment. If you don’t have some borrowings, you will be able to avoid paying interest. Moreover you can reduce the risk of being charged for late or missed repayments.
• If your earnings do not support you to repay the balance in full, you have to try to pay more than the least requested repayments. If you keep paying only the minimum amount, it will take years to repay a comparatively small balance which will cost you a huge amount as interest.
• Before signing up for a credit card, make sure that the card meets all your requirements. For example, a reward based credit card may be suitable for you if you want to repay your full balance during the end of every month. On other hand, if you tend to spread your repayments then a card with low interest will suit you best.
• If you are already being charged a high interest rate for your existing credit card balances, it is worth taking into account for consolidating these. You may do this by a 0% balance transfer credit card or taking a loan to repay all your balances.
• Above all, you should resist the enticement to use your credit card in order to purchase a thing that is really not necessary for you. Always remember, all the expenditures you make through a credit card will have to repay by yourself. So don’t make a purchase if you can’t afford them.
Thanks for sharing all these extra tips! I’m sure it’ll be useful for everyone. Could I share these on a blog post with credits to you?
Credit card is your Friend only if you do the following.
ALWAYS PAY YOUR CREDIT CARD BILL FULLY EVERY MONTH !!
You will be known as a DEAD BEAT to the credit card companies.
But at least you are SMARTER and WISER not to fall into their credit card debts trap they lay out for you.
Buzz is absolutely right.
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