Credit Card Danger

You have to be cautious. Overspending can be an addiction, like alcoholism, drug abuse or compulsive gambling. Even though you feel that you're in control with your finances, there's a lot of temptation. Credit card companies send out millions of solicitations for credit cards and offer incentives to entice you to sign up. They'll even send you a notice that says you're "pre-approved."

Before signing a credit card application, get familiar with it and read the terms of the agreement. Remember, the offer could start with a low interest rate but then increase after a couple of months. Then it becomes easy to purchase items you think you need. (Learn to distinguish your needs from your wants). If by the end of the month you don't have enough cash to pay off your bills, you will start accumulating finance charges. If this keeps happening, you may get into deep credit card debt. At the very least, you'll end up paying a lot more for your purchases than their original price which might put you in serious financial difficulty.

  • Try to pay as much of your credit card balance as you can each month.
  • If you are only making the minimum payment each month which covers only interest charges -- it means that it will take you a long time to get out of debt.
  • Pay off the credit card that has the highest interest rate first.
  • If you are not careful with your credit, you may not be able to get a good loan to buy a car, house, or pay for school.
  • If you get behind on your bills, your creditors will be calling you and generally making your life miserable.
  • If you overspend, you won't have much money left over from your paycheck after you pay your bills.
  • Don't apply for a lot of credit cards.
  • Know exactly how much money you owe.

If you're having trouble keeping yourself from overcharging, cut up your credit cards, then call the credit card companies and tell them to close your accounts. Decide which credit card has the lowest interest and keep it for emergencies only. If you think you need help, credit.org is here for you!

Visit us at credit.org for more information