Our Archive of Articles About Financial Literacy and Other Topics
Be Aware Of The Dangers When Using Credit Cards
May 17, 2007, 3:29 pm
Credit education article on the dangers of credit card use and credit card debt.
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 cards and offer incentives to entice you to sign up. They'll send you a notice that says you're "pre-approved."
Before signing a credit card application, get familiar and read the terms of the agreement. Remember the offer could start with a low interest rate but then after a couple of months will increase. Then it becomes easy to purchase items that you think you need. (Learn to distinguish your need from your wants). If by the end of the month you don’t have enough cash to pay off your bill 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. You might put yourself in serious financial problems.
- Try to pay as much of your outstanding balance on your cards 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 card that has the highest interest rate first.
- If you are not careful with your credit, you may not be able to get a loan to pay for graduate 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, Springboard is here for you!
About Springboard Nonprofit Consumer Credit Management
Springboard is a nonprofit credit education and financial counseling organization founded in 1974. The agency offers personal financial education and assistance with money, credit and debt management through confidential counseling. Springboard is accredited by the Council on Accreditation, signifying high standards for agency governance, fiscal integrity, counselor certification and service delivery policies. The agency provides pre-bankruptcy counseling and debtor education as mandated by the bankruptcy reform law. Springboard is a HUD approved housing counseling agency and a member of the National Foundation for Credit Counseling, a national organization of nonprofit credit counseling agencies. The agency has several locations in California and offers face-to-face and nationwide phone counseling services. For more information on Springboard, call 1-800 WISE PLAN (1-800-947-3752) ext. 7750 or visit their web site at www.credit.org.
