Credit Cards

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by: barrywaters
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Word Count: 489
Date: Sun, 22 Feb 2009 Time: 5:53 PM
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The findings of its yearly survey of consumer credit card behaviors was just released by Consumer Reports. One shocking statistic from that report shows that about 12 million consumers are still in debt from holiday shopping from the previous year. The flood of accessible loans and credit of the previous ten years allowed consumers to easily be approved for credit cards and also enticed many to rack up balances. Given the recent credit crisis, there is a trend in banks requiring higher minimum payments for balances on credit cards. Many consumers are turning to the use of credit cards, in the absence of once available loans and lines of credit. Though practical, credit cards can easily contribute to debt, if not used responsibly.
There are many advantages to using a credit card, especially if you are making an expensive purchase. For one, you do not have to carry a wad of cash in your wallet. Credit cards come with some safety nets too. If a charge that you did not make appears on your statement, you are most often not responsible for paying anything more than $25 or $50 of that charge. It is also easier to dispute issues you may have with customer service or a product, if you paid via credit card. And the click and mortar internet retail sector would not be able to sustain itself without payments made via credit cards. Thanks to your credit cards, you can buy diapers online and have them on your doorstep within a day. You do not have to hassle with waiting to send a check or money order. Lastly, purchases made with credit cards can be easily tracked. You have to remember to keep and file receipts and invoices when you use checks and cash.
The ease of use and protection offered by credit cards make them a preferred payment method for many consumers. But credit cards come with a dangerous allure. Many people only make minimum payments and continue to spend. In a perfect world, all purchases made on a credit card would be paid in full each month. Doing so would mean that nothing would be paid in interest. Paying only the minimum payment each month means that most of that payment is interest to the bank, and does not pay down your balance. By regularly paying only the minimum payments each month and continuing to make purchases on those credit cards, a consumer can easily get stuck in a cycle of debt.
Credit cards should be viewed as a method of payment, not a loan to buy things that a consumer cannot otherwise afford. Payment schedules should be followed to avoid fees, and balances should be kept within responsible ranges. By keeping balances on credit cards in check, unexpected expenses for emergencies can be managed with ease. Remember that the credit cards are in your name and you own the balances incurred on them.

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Learn the real scoop on credit card applications, link to www.getsmart.com.

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