It may seem strange to put credit cards, drugs and alcohol all in the same sentence but there are many similarities.

All three cause addiction and abusers of each will do almost anything to continue feeding that addiction. All three can cause serious harm to the person involved if they are allowed to get out of control. All three have the potential to destroy what you may think of as normal life though only one is illegal.

Spending real money can become addictive too but generally speaking, people accept that they have a limited supply of cash. Somehow a credit card can seem to be like a well that you can constantly re-use and it never runs dry. Only it isn’t and it can indeed run dry. The day when the shop assistant tells you that your card has been refused can be a big shock. You may feel embarassed even insulted but unless someone has been using your card fraudulantly there is no-one you can blame except yourself.

Credit cards are addictive. Some people are better at self control than others but we all have those human weaknesses that allow us to convince ourselves that it’s ok, even when we know things are not right. Unfortunately credit card suppliers play on those same weaknesses when they advertise and encourage us to use their credit cards.

You can afford a better lifestyle, is the message they give out. We should question that statement though. If we can’t afford that lifestyle now then how would paying extra, in the form of interest, help? Unfortunately, human nature being what it is, we don’t look too deep. Maybe we don’t want to be disappointed and that new car, washing machine or TV looks so very tempting.

Credit cards like their addictive cousins, alcohol and drugs, can be used sensibly. They can be enjoyable, useful and even beneficial but they must be kept under control. There is no such thing as a free lunch and that is especially true if you pay for it with a credit card. The interest piles on month after month and before you know it that cheap dinner has become an expensive burden even months after you have forgotten what you ate.

So you take appropriate action. You pay off more than the minimum payment required. You add extra payments and slowly but surely you bring that debt down. One day you celebrate, with a big grin on your face, you are finally debt free. So should you burn your credit card and vow never to touch one again?

Financial life, these days, means that money is not always enough. You can use a debit card in most places where you would otherwise use a credit card so they aren’t essential. However, using a debit card gives little protection. Using a credit card, on the other hand, does give additional consumer protection which generally makes the credit supplier liable as a joint party with the seller of the goods. If the seller goes bust you can claim against the credit supplier. If you had used a debit card, or cash, you could only make a claim against the bankrupted business and it’s administrators.

So there are financial benefits as well as the convenience of using a credit card for payment over the phone or internet. What we need to do is change the way we think of credit cards. They are not a wad of cash they are, in fact, a commitment to pay money. The cost of the item plus interest payments. With alcohol you don’t have to get drunk to enjoy it’s benefits and you don’t need to become overwhelmed by debts or buy everything in the store to benefit from the use of credit cards.

Sensible use of credit cards will ease the financial burden of sudden and unexpected costs. If the car needs repairs or the roof starts leaking you don’t want to have to wait to save the money to pay for it. Credit cards allow you to have the work done straight away and pay over a period of time. Decide on a period to repay that debt though. Do not just pay the minimum repayment required. Be firm with yourself, pay the debt off quick as possible and stay on course for a comfortable financial life.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

Related posts:

  1. How Your Spending Power Is Reduced By Credit Cards
  2. Credit Cards Talk Of Reintroducing Annual Fees
  3. Credit Cards The Hitman In Your Wallet
  4. Credit Cards Restricting Transfer Deals
  5. Government Introduce Proposals To Change The Way Credit Cards Operate

Filed under: General

Like this post? Subscribe to my RSS feed and get loads more!