Credit Cards, a great tool, to be used wisely

Credit Cards, a great tool, to be used wisely

by Daniel Spivey

A credit card is small plastic card that contains information such as signature or picture, authorizes the person named therein to purchase up to the limit of credit sanctioned and the billing is done periodically and the repayment is normally after 30 days or 40days from the date of purchase. Credit cards offers are plenty and extended through post, email or by phone. They are offered with fabulous gifts, discounts and exciting to read.
Before stretching eager hand and accepting the offer, some kind of self assessment has to be done. The credit card debit is a tremendous problem by habitual usage of credit cards. Some times the credit card debit is disastrous to the financial status of an individual. People should not be carried away by temptation and it is always to have low credit limit on credit cards and this restricts the frequency of usage. Once decided to go in for credit cards, it is always better to analyze the different offers relating to rate of interest on overdrafts, penalty for delayed payment etc. The card should have any long term financial plan like big loans for vehicle etc. Credit cards are great tool and like any other tool it should be issued wisely to prevent any harm. Multiple credit cards signal lenders the potential to get over head in debt fast. However, fewer credit cards help to efficiently monitor the spending. If there is need for more credit, then the credit limit of the existing card can be increased on request.

There are several credit cards are available viz., visa cards, master cards, silver and gold cards, international cards etc. Initially the Bank sanctioned certain credit limit on each card. However, on seeing the repayment history, the banker may increase the credit limit.

Though Credit cards have been around for a long time, only recently people started to use these cards for purposes other than paying for larger expenses, trips and luxury items. Credit cards are used for general shopping but now there is a new and expensive trend when it comes to credit card use. The heavy interest rates on credit cards can cause problems.. Losing a job or falling ill can make a huge difference when it comes to paying off debts and many consumers are now starting to notice that credit cards are often responsible for many financial problems. Financial experts see a rise in credit card loans and payback problems. The best way to get rid of a credit card debt is by cutting up your cards. Putting the card aside and not using it is often too tempting for people and many consumers en up sending back their card to the company that issued it, to avoid running into further debt. Successful debt elimination starts with cutting debt costs and returning the credit cards is a huge step forward. People often notice that their repayments on these cards get less gradually and as they are not able to take more money out on the card they will able to recover monetarily.