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When talking about credit cards, the first thing that comes into our minds is “Woww, I‘m important!”. In the primeval times of “plastic money”, it meant having a lot of money put into a little slip of plastic. As time went by, more and more people began to use it and knew very little about the stumbling blocks. We throw some light on the things people overlook, regarding credit cards.
Curtains Drawn
There are some people who say that they know how to handle credit cards, raking up pots of money with a series of four or five cards, then use one to back up another and so on…
And they even make money on it!
Of course, they do not tell you the other side of the story, which is to use the money to make individual business operations that give them twice the interest they are paying. They always pay back because they are buying and selling all the time and they even have cash to keep in their pockets.
And We Nitwits Fall For It
We think that it is only our side of the deal that counts, we have only one credit card and as soon as the balance gets too big, we begin to make the minimum payment, in the hope that dear Providence will give us the cash to overcome our debt. Even though we know it technically, we do not acknowledge the fact that we are paying double interest.
One is the fee for using the card, which takes on the shape of a percentage and the other is the percentage rate that you must pay for financing. In addition to this, the interest rate is high, considering it a short term APR. Despite that, we make it a long term debt, because we keep postponing the big payments, getting into a downward spiral with a “finish line” that says “BROKE”.
Hey, Wait A Minute!
I am certainly not saying that credit cards are bad. They have their advantages and disadvantages like every other financial tool. It is just that they must be used for what they were invented for.
With a credit card, you do not need to carry cash around and, if you are in need of a little cash to buy something you can not pay for with plastic, you can draw it from the corresponding ATM and pay for it when your monthly balance comes.
Use The Right Tool
If you need another kind of sum, do not use a credit card. That's what loans are for. It is like using pliers to hammer a nail. You end up spoiling the pliers and you might even end up with a smashed thumb. My father, a man whose wisdom I discovered completely only after he passed away, used to say, “Use tools for what they are meant for”.
What Can A Loan Do For Me Now?
Once you have a credit card debt, you can use a loan to pay it off. But do not crucify the card! Learn how to use it and make the best of its advantages and stay away from its disadvantages. A loan can give you even more profit if you use it right from the start, using your good credit rating, obviously before it is spoilt by credit card default.
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