Credit Cards have no doubtfully trumpeted themselves as a consumers worst enemy, making it easy for them to rack thousands of dollars in consumer debt, then find themselves later trying to pay down the high balances. However, for those who can handle the luxury of borrowed credit responsibly, credit cards can be an easy way to establish positive credit, and build trust from other lenders.
UNDERSTANDING THE CON’S
Generally, the negative reputation of credit cards have rooted from financially irresponsible consumers; those who’ve signed with a company with high interest rates (most often department store credit lines), and those who spend more then they have in the bank.
It’s more than important to read and RE-READ the terms and conditions of being a cardholder, know and understand your CREDIT RIGHTS.
Even though it may sound pleasant to receive 10% off each of your in store Macy’s purchase, it may not seem so nice anymore when you receive your first billing cycle and find out you are paying over 20% interest on each of your purchases, interest builds quickly!
The best way to dig yourself in a hole of debt is to spend more then you bring to the table, and consistently make the minimum payments.
UNDERSTANDING THE PRO’S
Not all credit cards are bad, especially when used by a consumer who is financially savvy. Having an open credit account can also teach you responsibility and discipline when it comes to budgeting and finances.
In fact, using a credit card is the most SECURE FORM OF PAYMENT, yes more secure then your debit card.
Now, for those who are financially responsible enough to rake the perks of having a credit card(s), the benefits can be endless.
–CREDIT CARDS AND YOUR CREDIT SCORE
Having an open/active and positive credit account(s) reporting on your credit report creates and establishes a lengthy POSITIVE credit history in which accounts for a higher credit score. Remember, your score determines how risky you are to a lender, so if you are looking to apply a home loan to purchase a house, or an auto loan to buy a new car, the better your score the better your loan.
The best way to improve you credit score while being able to use a line of credit is to carry NO or LOW balances. The easiest way to do this is to spend only what you know you can pay right off. Spend credit like cash, and pay MORE than the minimum payment each month, in fact just pay the whole thing off!
–CREDIT CARD REWARDS AND PERKS
For the financially responsible consumer, there’s many rewards and perks you can find through different credit companies. Often times you can rack rewards to save on vacations, or cash back perks. It’s important to try and save yourself from over-spending just for the rewards.
TREAT CREDIT LIKE CASH
Credit cards are a powerful tool, and when used responsibly can rake many benefits.
As a consumer, try to detour from over indulgence; we can’t always get what we want all of the time, and if you don’t have it in the bank, then don’t swipe on credit.