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Credit Card Addiction and Misuse
Credit cards are most definitely are part of our lives, no matter if you make purchase online, offline, in person or where you are. You cannot rent a car without a credit card, it is difficult to make reservations without a credit card, and often you cannot prove you have cash to get credit line online unless you have some type of credit card.
Credit cards are available with every turn of your head. As you are in school, credit cards are offered to you because you have a good credit record. Taking out your first loan to purchase a car or a house, more credit cards are offered to you. Misusing your credit lines, your credit cards, and even having too many credit cards can mean trouble for your financial future.
Those who are not in the highest earning capacities, meaning, most of us use credit cards to purchase what we cannot afford, often misuse credit cards. Continually purchasing what we can’t afford is only going to lead to making payments on credit cards for years, breaking our household budgets to the point of then having to find other methods of paying down the debt and making the debt ‘go away’.
Students, those who are just married, and those who have lost their jobs or are in between jobs are people who are most likely going to use their credit cards for the necessities in life, but then are left with very high bills to pay as they get on their feet and get jobs.
Think about this: if you are purchasing just $100 worth of groceries at the store because you do not have a job, your minimum payment is going to be about ten dollars. In addition, if you only make that minimum payment on your credit card, your interest is going to be added to the $90 worth of groceries on the card which is putting you back up to about $95 that you owe on that credit card the next month. The cycle continues as you try to get work, find a job, save money, and get by in daily life. If you must charge, plan to only purchase what you absolutely have to have to get by.
How can you prevent putting too much on your credit card?
Try your best to plan for when your bills are due. If you know your credit card payment is due the tenth of every month, be sure that you have enough in your checking by the first to make that payment. Going out to the bar or going shopping when you know your bill is coming due just doesn’t make sense because you need that money to keep your bills paid in full.
Part of planning ahead and staying on top of your bills means that you also should have some type of emergency money put away so you don’t have to rely so heavily on your credit cards in case of problems in your personal life. When you are working, put just ten dollars a week away, and after a while you will have a nice emergency fund built up. Every family should strive to have at least two months worth of pay put away in a savings or a sock for emergencies.
How can you get a grip on your financial future?
Stop using your credit card for every purchase that you cannot pay off in full. If you cannot make the minimum payments, you need to stop using your credit card all together so you can work on getting that balance down. If you can’t afford to buy gas, try your hardest to find another way to conserve money so you don’t build up that debt any higher.
Make yourself a limit of having just two or three credit cards. You do not need five. You cannot afford five credit cards. Consolidate your bills so you can afford the monthly payments and you will put extra money back in your own pocket every month to live off while you continue paying on your bills. Cut up extra cards. Cancel those extra credit cards. Keep the credit cards with the lowest interest rate and get rid of the rest.
Get a hold of how much you are spending and on what. Write down everything that you purchase for a month, from the pack of gum to the gas, the groceries, and the gifts for others. Review your listing and learn about where in your household budget you can cut back on things you really do not need.
Putting a hold on how much you are spending and using your credit cards will help you financially in the future. Using credit cards for purchases that are emergency or that are necessity is really the only time you should be using your credit cards. Think twice before handing over your credit card – is the purchase really needed or is it just for fun and looks?