Ditch The Credit Cards To Save Money
July 2, 2008
Modern society has become tremendously dependent on credit cards, to the point where most people don’t know what they would ever do without them. Unfortunately, this reliance on credit cards has brought at least one unpleasant side effect: debt, and lots of it. If you find yourself stuck in steadily increasing debt, think about getting rid of your credit cards all together.
Incredibly, some credit cards come with interest rates soaring as high as twenty-nine percent! Some people are fooled by low interest rate cards that become high interest the moment one payment is missed. To avoid such problems, be sure to read all the details of any credit agreement. If you wouldn’t accept a high interest rate for car or home loans, don’t accept it for you credit cards either.
Good credit can be established through the responsible use of credit cards. This means paying the bill on time and proving to lenders that you are can be trusted and are worth the risk involved with extending a line of credit. With good credit, you will be able to receive loans for furniture, a car, or a home at a lower interest rate.
Irresponsible spending with a credit card, however, can turn your good credit upside down. Charging more than you can afford to pay back leaves a balance on your monthly statement and interest will start to stack up. In a few short months, even a small initial balance can grow into serious debt.
Paying for services and other intangible things on credit cards is convenient, but is conducive to more debt. Charging the purchases of gasoline, groceries, and pedicures is fast and easy, but they quickly get used up or fade away. That means that when your bill arrives at the end of the month, you will have lots of purchases to pay for and little to show for it.
This doesn’t mean you should immediately stop using all your credit cards. They are incredibly useful in emergency situations. Unexpected car problems and household repairs happen from time to time, but you can be ready to pay for such necessities with a credit card.
After establishing your one emergency card, gather up the rest of them and cut them in pieces. Once the balance has been paid in full, contact the credit card company right away and cancel your account. The representative for the credit card company is going to do their best to keep you as their customer, so prepare yourself to withstand their offers.
Cash is being used less and less, but it can help to prevent debt. Before credit cards were used, people had to save their money in order to make big purchases. Adopting this practice is certainly a wise choice financially since getting into debt has become all too easy and commonplace.
Eliminate debt once and for all by getting rid of all but one emergency credit card. Then, start using cash to purchase what you need. If you really want to buy something special, it will be worth the wait as your save up and, without getting into any debt, purchase it.
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