Credit And Credit Cards

Spend some time surfing online or read the newspapers and you will find there are similarities between the two. What’s that you may ask? The answer is, credit card offers are all over. Almost everywhere you look contains an offer and even if you aren’t looking, when you get up in the morning and read your post, you’ll invariably find these offers in your mail, with a very personalized message to you. They’ll offer you all sorts of things, from great “savings” to low annual charges. In return all you have to do is open a credit card in your name. Seems good, doesn’t it?

Well, remember, “There is no such thing as a free lunch” and “Buy in haste, repent at leisure”. The trouble is, and also the reality, is that when you are running low on free cash, an offer of an instant credit line of several thousand dollars seems like a gift from the gods. At least, it does at first glance, but remember they are offering you this for a reason. They aren’t doing it for your health or pocket, they are benefiting from it. The offers on display are ‘tempters’ to enter into their credit trap. Indeed, it is so cleverly designed, that sometimes you feel like they are doing you a favour. Of course, deep down you know this isn’t true. Don’t you?

Before you jump in at the deep end, be sure to rationally consider a few aspects so that you have made an informed and wise decision. Such as: -

* Do you need more credit? Credit cards will not fix money problems. They can be a temporary band-aid in a money crunch, but they cannot provide any financial benefit long term.

* Did you read the entire offer? Sometime credit card offers will suggest that you are pre-approved and all you need to do is sign the application and the card will be in the mail. This is true however, if you are not approved for a standard card, they can approve you for a secured card, which requires a cash deposit on your part.

* What is the interest rate after the initial introductory period has passed? Although many companies offer a zero percent interest rate with a new account, that amount can increase substantially after just a few months. If you have a balance owing once the initial period has passed, you’ll be paying substantially in interest charges.

Now there are some good things about having a credit card. One of which is that credit is necessary to build a solid financial standing. That said, you would be wise to be careful about what debts you are amassing and which companies you choose to have those debts with, if any. Debt is a bad thing unless it’s used to acquire assets that work for you. Don’t confuse liabilities with assets. Items such as a new car aren’t an asset, they are a money pit. Remember, it’s you that will be paying the interest bill for the next ‘x’ number of years, not them.

Also, don’t think of credit cards as if you aren’t really spending, as you would with hard cash. You are. Not only that, you are spending and having to pay interest. For that reason, keep the number of credit cards you have down to a minimum and try to pay the balance off in full each month, if possible.

Happy credit card hunting!

Article by John Feldman at Credit Card Deals. The essential one-stop credit card resource.

Tags: bankruptcy, loans, bad credit credit cards, apply credit cards, personal finance

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