The Right Way to Manage Your Credit Cards

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We live in an age where credit cards are used more often than cash in every aspect of life. Gone are the days of only purchasing products that we can actually afford. Today we buy on the premise that we can pay for the item over time, often regardless of our income. We have lost sight of money management and become a society of instant gratification.

As the economic crisis started hitting home and people lost their jobs, had their salaries slashed, a rude awakening entered our front doors! Suddenly the idea of purchasing because we wanted something was replaced with just trying to pay the bills we already had. People started putting their credit cards away and only pulling them out to pay bills that couldn’t be put off.

The problem was that our credit card debt was already completely out of control due to too many years of thoughtless purchases and too many years of using our credit cards for instant gratification. Now people are using their credit cards to pay the minimum monthly payments on other credit cards! It is a vicious cycle and one that is destroying credit ratings all over the country.

The reason this is a problem is because interest and finance charges continue to accrue on your credit card balances. If you have a balance of $10,000 (which is the average amount of credit card debt per person in America) it will literally take you 40 years of making the minimum monthly payment to get this debt paid in full. Even our mortgages only last 30 years! You can easily see why using your credit cards can put you into serious financial crisis quickly!

We really should only use our credit cards when we are certain that we can pay off the balance when the bill comes in the mail. Consider the credit card as simply an advance on your next paycheck, this way you do not over spend. It is vital to realize that just because you have a $10,000 credit limit, that doesn’t mean you should use it! Just because you receive credit cards in the mail, that doesn’t mean you have to use them! Restraint is required to avoid falling into the credit card nightmare.

Obviously we do need to establish a credit rating. Using your credit card to purchase something relatively inexpensive and making the minimum monthly payments for a few months will do that for you. But do it on purpose, with the plan of doing it just to establish your rating and then pay it off.

If you are deep in credit card debt right now, contact a non-profit credit counseling company. They can help you to get your debt under control. Often times they can get your balances reduced, your interest rate lowered and assist you in getting a handle on your financial future.

Use credit wisely! It can take over your life quicker than you realize! Showing restraint, using it carefully can give you a good credit score and a manageable financial future.