Use Credit Cards Responsibly
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by: barrywaters
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Word Count: 528
The findings of its yearly survey of consumer credit card behaviors was just released by Consumer Reports. It found that 12 million people in this country still owe money from holiday spending from 2007. An increase in available credit the past decade has made it very easy for consumers to have multiple cards and has lured many into spending beyond their means. Given the recent credit crisis, there is a trend in banks requiring higher minimum payments for balances on credit cards. Some consumers that are financially strapped in the current economy are relying on credit cards rather than loans. Though practical, credit cards can easily contribute to debt, if not used responsibly.
Credit cards are a part of everyday spending for various reasons. If you did not have a credit card, you would have to carry a large sum of cash or a checkbook. Unlike paying with cash or check, credit cards give you some protection. If someone fraudulently makes a purchase on your card, you usually are not on the hook for more than $50 of that purchase. It is also easier to dispute issues you may have with customer service or a product, if you paid via credit card. The world of online shopping would not have been possible without credit cards. Thanks to your credit cards, you can buy diapers online and have them on your doorstep within a day. It eliminates the need for cash on delivery or money orders. An added bonus is that everything you buy with your credit cards can be easily monitored, itemized and put into budget tracking software. You have to remember to keep and file receipts and invoices when you use checks and cash.
The ease of use and protection offered by credit cards make them a preferred payment method for many consumers. But credit cards come with a dangerous allure. It is all too easy to pay the minimum payments each month and keep increasing the balance. In a perfect world, all purchases made on a credit card would be paid in full each month. Doing so would mean that nothing would be paid in interest. Paying only the minimum payment each month means that most of that payment is interest to the bank, and does not pay down your balance. When consumers do not pay the balances on their credit cards in full, therefore, it is not difficult to increase debt.
Credit cards are a very practical and convenient resource, but should not be used to pay for unnecessary things that push consumers beyond their means. Payment schedules should be followed to avoid fees, and balances should be kept within responsible ranges. If you responsibly purchase with and pay off your balances on your credit cards, you will also be able to handle emergency expenses more readily than if you carried balances on your cards. Only you are accountable for the balances you carry on your credit cards.
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