How to Use Credit Cards Properly
Credit cards can be great. They were created for a reason. That reason was not to put us all in blind debt by spending money on things that we knowingly couldn’t pay off in a reasonable amount of time or spend money we simply did not have. Of course, some creditors like it this way so they can collect endless streams of revolving debt from us, but that’s not what they are there for as far as the consumer goes.
What are Credit Cards for then? Well, good, LOW INTEREST credit cards are good for the average consumer in that they let people purchase things that they simply don’t have lump sum cash for all at once. This doesn’t translate into things you’ll NEVER have money for, but rather things that you’d rather pay off slowly over a few months not a few years.
The few years part is important. If you take years to pay off a credit card purchase, this is when you start to let the creditors win and make a ton of interest off of you – interest that you could be otherwise investing in other wiser things.
It should always be a rule of thumb to never make a large purchase on a credit card – preferable a low fixed rate card, that cannot be paid off in three months or less. This way, you are paying minimal interest for the privelege of purchasing the good or service. This translates into more money in your pocket for you and your family.
If you lack this type of discipline, there are always prepaid credit cards that allow you to minimize the interest you pay, you only really pay for the initial purchase of the card, so it’s one fixed rate rather than constant revolving debt over the months of purchases.
What does the future of the credit card look like? Well, there are many theories, but some think that the typical plastic card you have now in your wallet may be a thing of the past. You may instead use some sort of online verification to make purchases, or your credit cards may all be housed on some sort of scannable device that automatically can pick up whichever card you are using electronically.
But that may be in the distant future. Remember, credit cards used to be on paper and cardboard when they first came out!
If you use your credit cards wisely, they serve a real, tangible and beneficial purpose to the average consumer. It’s when they are abused or downright misused when the problems come in.
