Be Responsible With Your Credit Card Use

While reading some other blogs on credit card use, I wanted to agree with many of the comments that I read. Some said don't use credit cards, they are evil. While I won't go that far, you do need to be fiscally responsible. Others related stories of people in serious credit card debt.

Let me be clear about the use of credit cards. If you cannot pay off the balance in full each month, do not attempt to get credit cards that provide you a discount. The finance charges alone will eat up any savings you might get.

I would suggest that if you find you cannot pay the credit card in full each and every month, you need to cut that card up. Get rid of it. Start trying to pay off those balances with a vengeance.

20% or more interest a month is highway robbery. If someone said they were cutting your pay by 20%, you would be really upset. This is the same thing, they are just pulling the money out of your pocket in a different manner.

If you pay off your credit card bills each month, good for you!! You probably don't need to read the rest of this. However, if you do not pay off your credit card bills each month, you absolutely need to read this.

Let's talk about the checks that come with your credit card statement. Shred them. Don't even be tempted to use one. I was looking at some that I got today, and they advertise 0% interest (for 5 months), for the first check, and 3.99% interest for an additional check, all in big bold type. In the fine type is where they put all of the gotcha's. There is an immediate transaction fee of 3% when you use any one of the checks.

They use such advertising slogans as "Save by transferring balances from higher APR accounts", "Write a check to yourself", "Go on a well deserved vacation", ....

So let's say you are going to Florida for vacation, and need $2,000 for the hotel, gas and meals. But you don't have the money. Is it a good idea to use one of these checks. You write the check, immediately the credit card company assess you 3%, or $60. You and your family enjoy yourself, then come back. The bill shows up, you don't have $2060, so you pay $50, with the intention of paying off the card before the 5 months are up.

The 5th month rolls around, and you don't have the $1860 to pay the bill, because you didn't set aside money to pay it off. Now they start hitting you with interest. You continue to pay the $50 a month. Guess when the balance is paid off? Assuming 20% interest rate, it is 5 years later!!! And that is also assuming you don't get the silly urge to do the same thing again next year! Plus, during that time you paid in $1,047 in interest. That vacation cost you right at $3,050.

NO, NO, NO. These are not good ideas, nor are they financially responsible. If you need to borrow money (which I don't recommend), go to your local credit union for a loan. If they won't give you one at a decent rate, then most likely they are trying to tell you something.

Even though I have written about discounts on air travel and hotels, vacations are no excuse to borrow money. If you cannot afford a vacation, then plan a "staycation", where you search on the internet for fun things to do near your home.

Go to some public park and have a picnic. Or find a nearby lake. Sit back, relax, and you will be rewarded by avoiding that $2,060 or much worse bill at the end of the month.

Use your money wisely, don't give it to the credit card companies.