Credit cards are supposed to be used when you have a large purchase or when an emergency arises. That isn’t how many people handle their credit card use though. Credit cards are often used for everyday purchases like groceries. That can get you through a tough moment when you don’t have the cash you need, but remember that you have to pay that money back at some point. It can be very costly and that is how people end up running credit cards up to their limits. That often leads to financial ruin. You can modify your credit card use in order to avoid that financial ruin though.
How to modify credit card use to avoid financial ruin:
One Card- Keep and use only one credit card at all times. Use the credit card only when absolutely necessary. The card should be a major credit card that can be used nearly everywhere. Emergency situations will sometimes arise and you may need to use the card.
Bad Spending Habits- Bad spending habits often get us into trouble. You have to modify your spending habits in order to avoid financial ruin because of credit cards. Don’t use your credit card to make purchases on things that you don’t need. Wait until you have enough cash to pay for those purchases instead. It can be hard to wait for something that we really want. It isn’t impossible though. Avoid making credit card purchases at all. You will love being debt free from credit cards. Credit cards can become enslaving when we let them be. That is how they lead us to financial ruin.
Department Store Cards- Don’t use department store credit cards on purchases. In fact, don’t get any department store credit cards. These cards can only be used in that particular store and the interest rate is ridiculous in most cases. The other problem with using store credit cards or even having them is that they have an impact on your credit rating that could adversely affect it. It is better to leave these types of credit cards out of your wallet and off your credit report so that they don’t help lead you to financial ruin.
Limits- Credit card limits are given as a guideline to let you know how much the credit card company thinks your have the ability to pay back. Those limits don’t mean that you should charge the cards up to the limit. In fact, if you don’t modify your credit card spending, you could well end up in financial ruin. Going over your credit card limit starts you on a bad path. You end up with over the limit charges. After that you end up with finance charges on the over the limit charges and the story goes on. Keep your balance low on your credit cards in order to avoid financial ruin.
Payments- If you are in the habit of making your payments late, you need to modify that behavior. It costs a great deal of money every time you are late on your credit card payments. Just as the over the limit fees can get you, so can late charges. These add up to a huge amount of money after a while. They also lead to a very poor credit report. Keeping your credit cards paid on time is essential to avoiding financial ruin.
Attitude- Your attitude about your credit cards have everything to do with how your credit rating turns out because of them. Credit cards are not cash. That is an obvious statement, but far too many people think of their credit cards as cash without thinking about the fact that they have to pay the money back. Credit cards are a loan. Yes, the loan is a revolving one and you don’t have to get it approved every time you want to use them. Modify your attitude about credit cards so that you won’t end up with bills that you can’t pay. Your attitude about credit cards can lead you to financial ruin or steer you away from it.
Modifying the way you think about credit card use can make all the difference in the world as to your credit rating. A person can make or break their financial future because of your credit cards. Don’t let credit cards run your life. Change your behavior and attitude about them in order to have a sound financial future.