THG Formulations

Just ask yourself: is the credit card work for me or am I working for the credit card? Most people’s reply to this question will depend on how they use their “plastic pal” as credit cards are sometimes known. As many people with huge credit card debts will tell you, they didn’t realize that things were so bad until too late, because most credit card companies try so hard to make themselves seem like a charity. Well, take it from me, they aren’t.

However, this is not an anti credit card campaign. They have their uses – in America, for example, if you want to rent a car, you must have a (major) credit card. But, consider this situation:

You get an offer in the mail that sounds good, maybe it’s a new television or fridge. But it costs $2,000. You have a credit card with a $5,000 limit, so you go out and purchase the item right away. Often, this is how your repayment schedule will work out. Most credit cards charge a minimum percentage of the total balance (typically 2 percent) per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only $10 will come off the $2,000!

Does it sound scary? Well, it doesn’t have to be. The moral of the story is to use the credit card very, very carefully.

Credit Cards Dos and Don’ts

There is a lot of truth in the saying that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme song playing in your mind. Moreover, you would be wise to remember the following as well:

Dos.

1] Always plan for the purchases that you need and those that you just want. You need the essentials, but you only want everything else. The ability to make a distinction might assist you plan more sensibly.

2] If you are caught up in financial difficulties, it’s always a good idea to talk to the credit card issuer who might re-schedule your payments. If you just default, that only helps to build up a bad credit history and you might find yourself being denied credit in the future.

3] Unless you are experiencing an emergency, remaining within your credit limits will help you a lot. If you have to spend over the limit, ensure you are within manageable levels, say within 30 percent.

4] If your letterbox is chock-full of information on credit cards with more favourable deals than you are currently enjoying, you may always approach your issuer for a better deal. They want to retain you as a customer, so they will listen.

Don’ts

1] Do not use your credit card to make household purchases. It’s very expensive in the long run.

2] Do not only pay the minimum amount necessary. You will end up paying exorbitant amounts of interest. The quicker you are able to clear the debt the better.

3] Do not use the credit card to purchase things you can’t afford.

If you are thinking aboutchanging or applying for a Credit Card, check out the free advice on our web site about using Credit Cards wisely. Visit the Uber Article Directory to get a totally unique version of this article for reprint.

categories: credit cards,credit,finance,loans,mortgage,money,self help,advice,banking,funds,debt,shopping,auto,other