Personal Finance Reality Check – Can’t Stop Using Your Credit Cards?

December 30, 2009 by  Filed under: Credit 

Many of the Americans who are now enrolled in a debt relief program are there for a reason. Most often, that reason is credit cards. Credit cards are great to have and they aren’t necessarily a bad thing. What is bad is how we have used them. Unless you want to see yourself enrolled in a debt relief program in one or two years, you need a personal finance reality check. Keeping reading on to see why proper credit card use is very important.

* You Pay More with Credit Cards: It is no secret that credit cards are a convenient way to pay, but you always end up paying more. Lets say that you charge a $150 party dress. If you were to use your debit card, pay in cash, or write a check, that dress would still only cost you $150. At the most, you might be charged.10 whopping cents to use your debit card or write a check. But if you use your credit card, think about the interest rate. Add that onto your total. With that said, if you don’t pay off your purchase at the end of the month, that interest rate keeps increasing the cost of your party dress more and more. When all is said and done, you might have paid as much as $200 or $250 for it. That sale you got at the store wasn’t so great after all!

* Costly Late Fees: Here is where debt and debt relief always end up coming into play. Let’s say you missed a payment on that above mentioned party dress. Your minimum monthly balance will increase and it might be by a lot. So lets say your minimum payment was $50. You missed that (for whatever the reason), next moth the credit card company is asking for $100 (which you don’t have to pay). The next month, well you use your imagination.

It is never a good idea to use your credit card for things you cannot afford. If you do have money to spend, ensure you mail our your check on time. If you are late in doing so, pay over-the-phone or online to avoid that costly late fee and minimum monthly balance jump. Remember, this is often your best shot to avoid needing professional debt relief help later.

* Credit Score: Now, let’s be honest here. If you use your credit card wisely and if you make on time payments, that credit card of yours will do wonders for your credit score. It will help give you good credit.

The issue comes from improper use. If you miss a few payments, these will show. If you stop paying your bills, these debts will show. If you enroll yourself in a debt relief program that settles your debts for less, these will show. Basically that $150 party dress you bought and other purchases can impact your ability to get a home, mortgage, or personal loan for years!

In short, the solution is not to avoid debt relief professionals, but to call them when the time is right. Remember that even that sometimes it may not be too late, it may cost you a lot more to get out of debt rather than if you would’ve called at the right moment. Consider a debt relief program right a way and consult with a professional on the nature of your debts. You should find the link below quite useful from this point of view.

If you are over $10,000 in unsecured debt you really should consider getting a debt settlement. Creditors of unsecured debt are fearful of collecting and they also have stimulus money to make debt settlements financially feasible for them. Once the economy turns around it will be too late to eliminate your debt. Check out the link below to locate legitimate debt relief companies in your area: Free Debt Advice.

Article Source:

http://EzineArticles.com/?expert=Ryan_Worthington

Ryan Worthington - EzineArticles Expert Author

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