Credit Trap, Predatory Lending, Man Caught4Credit card industry now abounds in numerous ways, and there doesnít seem to be any deficit of credit card offers. Credit card companies used to bombard their consumers with attractive offers via the Internet, by post and from everywhere else. Keeping your credit balance under control under such circumstances can be rather difficult, and finding the right credit card provider may turn to be even more difficult.

Opening a Credit Card

When people apply for credit cards they often don’t consider them as “money spending”. Moreover, opening a credit card is usually free of charge, making it very easy to use a piece of plastic in any payment-related situation. This is what leads so many people to overspending. In fact, credit cards were not meant for people with ìsqueezedî budget. You will have to make monthly payments for using them. Even if your payments are minimal, and you successfully avoid late fees, paying your balance off may take decades. In fact, most of the credit card problems derive from a debtorís inability to keep his finances under control. As practice shows, recognizing the first ìsymptomsî of your credit card debt issues will help you solve them before they become crucial. According to the latest surveys, an average person now spends 40% more money for shopping when he uses a credit card rather than cash money. Such overspending, along with accumulating debt will negatively affect your credit score and damage your financial well-being. Having a balance of about 30% of the credit card limit means a serious debt to your credit availability ratio. At the same time, your credit rating recovers when the “debt-to-credit” ratio decreases, showing that you are able to wisely manage your finances.

Important Points You Should Know

It is important to understand that the major credit cards are accepted almost everywhere. Thus, it doesnít make any sense to take a heap of other ones with you. Having two cards in your wallet would be quite enough. This will enable you to keep a good track on what you spend, and keep you out of the trouble of managing various bills each month. Another danger associated with credit cards is personal credits. This way of borrowing money is very convenient when it comes to an urgent necessity of extra cash. However, these credits come with rather high interest rates monitored by the credit providers on daily basis. Using such services, you can end up owing much more than you initially expected. If you need extra funds it would be better if you use same day money online service. However, if you use these services in regular basis, you may find your debt increasing rapidly, as the interest rates on personal loans can be very high sometimes. Instead of this, you can apply for no-frills cards with absolutely no annual fee, moderate APR and no reward programs.

Using credit cards wisely is what will dramatically improve your credit score. But you have to be very careful and avoid temptations in order to reach it. In fact, timely payments and a high credit rating will make you a good financial background by the time you decide to buy a new car or a home.

Considering the unstable economic situation, excessive spending should now be avoided as much as possible, along with missed bills and seemingly attractive credit offers. Remember that each of these things may seriously damage your credit score so spend only the money you are able to repay in full amount if you want to be financially independent.


Robert Gombos

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