Ever since credit cards were first introduced to the market, they have been extremely popular with most people having at least one.
And too many people having too many! Even younger people and students are provided with credit cards by their parents. If you already own a credit card or plan to apply for one, there is one thing that you must keep in mind. It is the fact that plastic money must be used with utmost caution
Why Handle with Care?
While using a credit card is convenient and quick, consumers or cardholders 
need to be particularly careful about how they handle this small piece of plastic. What is the danger in paying with credit cards? Too many people use them with the best of intentions. And then something goes wrong and they can only make the minimum payment. And sometimes not even that.
Consumers slowly dig themselves a hole they may not be able to climb out of. Credit card debt accumulates fast and without the proper management lead their owners into deep financial trouble. Did you know that credit card debt is the number 1 reason people file for bankruptcy?
Some credit cards are also known to carry expensive interest rate charges.
Before long you find yourself caring a large credit card balance. If you have bad credit, the interest you pay on that balance can be crippling. And if you have good credit, your interest rate is initially low. But can skyrocket if you do not pay on time or by chance miss a payment.
For instance, let’s say that your credit card charges 15%. At 15% rate, a $50 worth of purchase can become $57 if you add the APR. Imagine how much more a cardholder will pay if he/she decides to carry over a balance. If the cardholder isn’t careful, debts can double or even triple in a few months.
Beware of high fees!
Aside from the interest rates, some credit cards are accompanied by high maintenance fees such as late penalty charge, annual fee, balance transfer cost, transaction fees, foreign conversion fees, etc. Add up these costs to your bill and it’s easy to see how a person can easily become overwhelmed.
Credit cards make it all too easy to overspend
We all have those days when we need a little “shopping therapy”. But its a bad idea. Especially if the only way you can go shopping is if you use your credit cards. One of the basic tips given to all credit card holders is to pay off your balance at the end of the month.
But It is crucial to be able to pay your bill off each month. Paying the minimum balance will cost you a small fortune over time.
Ways to get out of the credit card debt trap
- If you are a first time credit card holder, understand your duties to your credit card company. Learn the difference between important purchases and not important ones. If you must use your credit card, see to it that you will be able to pay off your balance on time.
- For people who own two or more credit cards, it’s best to monitor each of your accounts regularly so that you can be aware of the status of your debt and repayment.
- Understand the terms and conditions of each credit card as different issuers may impose different policies, particularly in matters of repayment.
- Create a monthly budget. Make sure you allocate enough money to paying your debt that allows you to pay off your credit cards in 6 -12 months
- Get a part-time job. Sometimes you just need to make more money to get yourself out of debt
- If you are good with explaining things to people, or a social person you may want to look into joining a direct sales company. Many people make enough to add to their budgets to pay down debt. And then some make enough money to actually quit their Full-time job!
- Last but not the least, be the one in charge and never let those plastic cards take control over you.
