Your Credit Card Is Not Your Friend
Although credit cards are necessary, keep in mind that they are not your friends. Since credit card companies live on interest charges collected from their customers, they always try their best to get the most money out of your pocket without you noticing it. Nowadays, getting approved for a credit card is easier than ever. Everybody owns at least one credit card, and we create a bad habit of using credit cards anytime and anywhere instead of using actual money we have in our checking account. The most common way credit card companies, especially smaller ones, use to attract more customers is to ask you during checkout if you would like to save 10 or 15 percent on your purchase. From Target, KOHL’S, or TJMaxxx, to JCPenney or Macy’s, every single retailer wants to offer their customers some sort of credit card.
Most of the time, these credit cards have very high annual interest rates. Unlike in the past when we had to wait two to four weeks to see if we were approved for a credit card, in the present day, this process takes much less time and effort. This clever trick resulted in a lot of people having more than one credit card and using them carelessly. Though credit card companies nowadays often offer some cashback on your purchases, if you look carefully at the interest rates, you will see that cashback has no use in saving you from debts. The more you spend, the more credit card companies take away your money.
The bigger the monthly balance on your credit card, the more money you lose. When was the last time you paid off your credit card balance? The majority of people, including myself from the past, never pay off our credit card balance. Why? It is simply because we spend more money than we have. Since the idea behind credit cards is to make a purchase then pay the balance at the end of the month, a lot of people took advantage of credit cards and eventually buried themselves in debt. I used to know a guy, one of my workout buddies, who has almost every credit card from almost every available credit company in the United States. Why would he need that many credit cards? The answer is simple. He thought that is it a good idea to use credit cards to make purchases and pay them off at the end of each month. The problem behind this practice is that he has never actually paid them off. As a result, he buried himself in debt. The deeper you are in debt, the harder it is to get out. It is simply because you can only afford to pay the accumulated interest charges instead of the balance.
In order to free myself from credit card debt, I stopped using credit cards from small companies. Not only did these companies charge higher interest rates, but they also imply hidden fees. As a student, I often find myself struggling with my monthly expenses, so credit cards help me to cover bigger purchases. However, to avoid interest charges building up, I set my goal at the end of each month to pay off the balance. This helped me a lot to avoid paying for accumulated debt. Another reason I am still using credit cards is that a credit card is safer to shop online. Nowadays, online shopping is common, and there are often a lot of good deals floating around. It will be too risky to use my debit card to shop online since cyber thieves can hack into my bank account and cause countless problems. To best take advantage of your credit card, as soon as you use your credit card for something, try to pay off that amount as soon as possible. Do not wait until the end of each month since you may forget what you bought and how much money you owe the bank.
If you are still struggling with credit card debt, it is time to take action. Stop using your credit card for random purchases. Only use it when you really need it.