Credit Cards and You
Practically everyone in the United States has credit cards. From
teenagers to retirees, almost everyone has at least one credit card.
Everywhere we go we see ads - in the television, radio, newspapers,
billboard advertisements - on credit cards. Some credit cards are even
mailed directly to our homes. But what are credit cards, why should you
have one and what are some of the risks involved?
Simply stated, a credit card is a financial arrangement between you,
the consumer or the card holder, and an institution such as a bank. The
arrangement specifies that you borrow money from the lending
institution with the promise that you will pay them back in the future.
The institution agrees that it will provide the money you need and
in-turn you are expected to return payment over a certain period of
time. Your payment will include not just the amount of money you
borrowed, but also an additional charge based on a pre-defined rate of
interest.
Credit can provide various services, making it an indispensable tool
for today's consumers. These include:
Convenience. You saw this wonderful dress in a shop. Perfect for
tonight's party, you thought. But you don't have money right now.
Thanks to your card, you can buy anything you want right now. Credit
cards give you that wonderful allowance not to bring that much cash and
to order goods from catalogs. In addition, many of the online-based
shops and stores, such as Amazon.com, mainly accept payment using
credit.
Emergency Protection. For emergency situation, credit cards can be an
extremely helpful tool that could be your friend that could pay for
your emergency needs, like when your car conked out in the road, or
your mother gets hospitalized, or any emergency situations that you
need money but can't get it from the usual means.
Putting you in the right budget. Want to keep a detailed record of your
expenditures? Credit cards can do that.
Security. In today's world, carrying large cash has become a problem.
If your cash gets lost, there's no way you can retrieve it. Compared
with credit cards, money cannot be returned back when it got lost or
stolen. If your card, for example, got broken or it got lost or someone
stole it from you, you can always ask for a credit card termination or
cancellation. You will have another card, a new one that will replace
it in a few days.
Traveling. If you're quite a traveler, whether across the town or
country, or outside the US, it is relatively easier to travel with a
credit card.
When used responsibly, credit cards can help improve our daily lives.
With credit cards, life can be much easier. However, the joy of using
credit cards can quickly change to a curse!
Are you starting to get notices from creditors to pay or "else"? Are
you worried that you might lose your properties like your house because
of credit debt? Chin up: Dealing with credit card debt is not as hard
as you may think.
And, if there's any consolation, you're not the only one facing such
situations. At some point, many people like you face financial crises
with credit card debt.
Here are some simple tips to help you cope with your credit card debt:
Make a Budget.
If you want to have a grab of your financial situation before you lose
everything, making a budget is what you should do first. Assess how
much do you get from your income or other means and your expenditures.
For example, if getting that posh apartment means you have to limit
your meals to once a day, then it is not a great and sound budgeting
decision. Your goal is ensure that you can answer for all the basic
necessities: food, housing, clothes, health-related costs, among others.
Contact Your Creditors.
Remember: Running away from your creditors is not the answer. It is not
a solution, and may in fact lead you to bigger problems. If you are
having trouble paying off your debts, address this immediately with
your creditors. State to them sincerely and fully the reason why it has
become hard for you to pay these debts, and check if they could give
you a revised payment arrangement that will put you at ease on your
payment terms. Do not let creditors turn over your situation to someone
or an agency to do the collecting for them, as this means that they
have given up on you.
Address Debt Collectors.
There is a law that gives certain conditions for debt collectors as to
when and how they should ask you to pay. The federal law, Fair Debt
Collection Practices Act, clearly states that those collecting debts
may not bug you, give false assertions, or do practices that are not
fair when they are getting to collect money from you.
Get Credit Counseling.
You could also consider getting the aid of groups or institutions that
will help you in your problems. If you managed to have an improved
payment arrangement of your debt with a good credit counseling
organization, creditors may approve of your proposition and accept your
modified arrangement plan..
Bankruptcy.
Generally, personal bankruptcy is known as the last choice to fix your
ballooning credit debt. A bankruptcy unfortunately stays on your
financial information report for years. Getting additional credit,
buying a house, sometimes even getting a job might be hard for you.
Technically, however, it is a legal way of addressing your credit debt.
Enjoy the use of credit to make your life easier. . .BUT don't let it
become a nightmare! Learn to use your credit responsibly.