Challenges of Having Credit Cards

Challenges of Having Credit Cards

Credit cards are a good thing when it comes to purchasing goods and services. They carry so many advantages – no need to carry cash, insurance on stolen merchandise, no need to do exchanges when in a foreign country, and the list goes on. With so many advantages, there are also challenges to them. Allow me to explain:

Overspending leads to a credit card balance – if a proper budget isn’t in place and you are not careful using credit cards properly, you will end up with a balance that cannot be paid off in full. If this continues on over a long period of time, soon your credit card space will be used up. Often, the credit card company will raise your limit, of which you then proceed to spend more. A higher balance means more interest charged – every month.

You are now lining the pockets of the credit card company; not yours – now you have a credit card balance; and the interest is growing. Every time you are paying interest, you are paying the credit card more money instead of you. This erodes your ability to purchase major items, your child’s education, and your future retirement, plus so much more. Finally, your stress level will start to rise as you see your purchasing habits going out-of-control.

It takes years to pay off your credit card when paying the minimum balance – if you have a $10,000 debt on your credit card, it can take up to 33 years to pay it off if you only pay the minimum balance every month.

Get even with your credit card debt – take action on your credit card debt. Get a budget, slash your discretionary spending, and turn your purchasing into positive cash flow. Make your payments larger than the minimum payment to pay off your credit card faster. Once you rid the credit card debt, it will be like giving yourself a pay raise, because the money used to pay off the debt can now be redirected to something like your retirement; lining your pockets instead of the credit card company!

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