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Credit Cards - Don't Fall into the Credit Card Trap

Updated on January 10, 2015

Credit Cards - Do You Have Too Many?

How many credit cards do you have?
How many credit cards do you have? | Source

Anyone Can Fall Into Their Trap

Let me take just a moment and give you a little history on myself. I recently worked for a very reputable debt settlement company for about 8 years. (I am now retired.) I have talked to thousands, yes thousands of people who are in debt of anywhere from as little as $5,000. and up to more than $100,000.00. in just credit cards. I have helped an array of struggling people from doctors and teachers, police and fireman, blue-collar workers, preachers and college students. Anyone can fall in to the credit card trap. I no longer have anything to do with any type of debt-company. I am here to give you some information to help keep you from becoming one of those people who are going to need outside help because of the credit card traps!

Keep a Credit Card for Emergencies

Now, let me say that if you are one of those people who only have one to two credit cards are you are able to pay off the balance within three to four months, good for you! I am not saying that you shouldn’t have a credit card for emergencies. I am not saying that you should either. I have one business credit card. It is strickly for purchasing products for our business and I pay it off completely the weekend after I used it. Other than this one, I haven’t had a credit card in about 8 years. If I can’t pay cash for it, I don’t buy it. If it is something I really need and I don’t have the money for it, I can borrow the money at the bank for a good interest rate that I know is not going to go up for some unknown reason.

Credit card companies have brain washed most of us into actually believing that they are doing us a favor by letting us have their credit card. Remember, the card companies are in business to make money, not give it away. Where is that money going to come from? Someone has to be paying interest and most people are paying more than 12%. Some people are paying as much as 29.9% and think there is nothing they can do about it, but pay it!

Fueling Up on Credit

Do you pay for gas with a credit card?
Do you pay for gas with a credit card? | Source

Introductory Rates

The credit card trap is intentional. The credit card companies are hoping that you are going to use their card often and run up a high balance on it. That is why they want you to use it to buy your groceries and gas. They are going to offer you 0% interest or 2% interest as an introductory rate. Sounds good right? Most of the time, the introductory rate is good for 6 months to a year. At that time the interest rates is going to go up. Usually the rate will go to 9.9%, if you have made your payment each month on time. Now you are paying them 110% for what you haven’t paid off yet.

But they were on sale!

Do you really have to have that pair of shoes?
Do you really have to have that pair of shoes? | Source

No One is Perfect

Now, what if something happens and you make just one payment just one day late! Believe me, no one is perfect! Haven’t you ever made a payment on something just 1 day late? Maybe it was the electric bill or the water bill; maybe it was the car payment. Did the company double or triple your payments because you were one day late? The credit card companies will. What do you do then? Now that $50.00 pair of shoes that you just had to have actually cost you somewhere around $100.00 to $150.00 or more! I have actually talked to people that will let their mortgage payment get behind to pay their credit card bill on time! It’s because they know what will happen if they don’t.

Raising Your Interest Rates

Did you know that you don’t even have to be late for the credit card companies to raise your interest rates? Did you know that the higher a balance you have on your card, the higher risk you are to them? They can raise your interest rates for that reason. Let’s say that you have two credit cards. If the second credit card company sees that your interest rate, for what ever reason, has been increased on the first card, they consider you to be "high risk" and can raise your interest rate. If your debt to income ration gets too high, they consider you to be higher risk and again, they can raise your interest rates. I have seen them raise the interest rates because a person was only making the minimum payment! Most people, including myself, thought that is what we were supposed to pay, we could pay more if we wanted to, but it was not going to have a negative impact if we didn’t. Think again!

What if You Lost Your Income?

There are people out there that may make upwards of $200,000. yearly, but have 5, 6 even 10 or more credit cards! Why use credit cards if you don’t need to. Now, life happens, we know who many people have lost their jobs over the last several years. What if it were you or your spouse? Maybe there is an illness in the family and one of you are no longer able to work. Now you are trying to live on half of what you were making before. I would say that at least 90% of the people I spoke with concerning their credit card debt, were in trouble because one of the income earners in their household lost their job. How many people do you know that have been downsized?

Projected Cost of College

Sending your kids to college is getting more and more expensive!
Sending your kids to college is getting more and more expensive! | Source

Paycheck to Paycheck

Most of us, no matter how much money we make, still live paycheck to paycheck. The more money we make, the better a house we buy or the better a car we drive. With the economy the way it is, can you honestly say, without a doubt, that you will have a job 6 months from now? Most of the people, who have been downsized, did not see it coming. Most people have enough put back that they can live on it for about 3 months. How much money do you put into a savings account or retirement account each month? Believe me, retirement age gets here much quicker than you realize. What about paying for college for your kids? Can you afford to take the risk of falling into the credit card trap?

We Are Spoiled

Unfortunately, we have become a spoiled society and we want, what we want, and we want it now. We don't want to wait until we have saved enough money to buy it. I am not going to say that you should not have a credit card to use for an emergency. If you feel that you have to have one, put it up somewhere, don't ever carry it with you. They are just too easy to use. I have had to help people that have already had to do a debt settlement program once and then fell into the trap for a second time! Now we are not talking about a VISA or Master Card debit card. With a debit card, you have the money in the bank, that is where the funds are being debited from. I try to put 10% of my monthly income into a savings account each month. Then if an emergency arises, I have it covered. If there is something I really want, I can pay cash for it. If it is a large purchase, I can borrow the money at the bank at a good interest rate and not worry about them doubling or tripling my payments.

Good Intentions

Everyone has good intentions when they get a credit card. They are going to use it for emergencies only or they are going to pay it off and the end of each month. Some people can, but they are very rare. If you have the money to pay it off every month, why use it, pay cash for your purchase. Some people think that they have to have a credit card to improve their credit score. Not true! You have a mortgage or a rent payment. You probably own or lease at least one if not two cars. You have a credit history. You don't need to have a credit card to improve your credit score. Remember, my husband and myself have not had a credit card for 8 years. We have excellent credit. Don't run the risk of falling into the credit card trap. I have told my children many times, learn from other peoples mistakes, don't wait to make those same mistakes yourselves.

How many credit cards do you have?

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I hope I have given you some information that you will at least think about the next time you start to pull out that credit card.


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    • sgbrown profile imageAUTHOR

      Sheila Brown 

      8 years ago from Southern Oklahoma

      Hello Shushanik! Congratulations! You are one of very few people who can use credit cards wisely. Good for you! Thank you for stopping in and leaving such a useful comment! Have a wonderful day! :)

    • Shushanik profile image


      8 years ago from San Francisco Bay Area

      I always use credit card, but I always pay off all the balance right away. I never spend money I don't actually have on my checking account. This way I earn cash back (at least $25 per month usually) and still don't have debts. Probably I'm one of the worst clients for those banks - they pay me, not I pay them :)))

    • vox vocis profile image


      9 years ago

      Thanks for the clarification :) I know that we are among the few without a credit card. Good for us, and sad when you think about other people. Credit cards cause worries, and worries cause all kinds of illnesses. It's a spellbound circle.

    • sgbrown profile imageAUTHOR

      Sheila Brown 

      9 years ago from Southern Oklahoma

      Hello vox vocis. You and I seem to be amoung the few that do not have credit cards. I had two at one time and "life happened" and I got a little behind. When I did, all hell broke loose! I paid them off quickly and have not gotten another. Working in the debt industry as I did for 8 years, I have seen many horror stories. What you use to buy your plane tickets with is a debt card. The money is "debited" out of your bank account, it is not "credit". We use our debit cards, they are much easier than writing checks and safer than carrying a lot of cash. I hope many people read my hub and learn from it. Thank you for your wonderful comment and vote. It is always appreciated. Have a wonderful day!

    • vox vocis profile image


      9 years ago

      I'm glad you wrote this hub about credit cards using the angle that you did. Like you, I don't have any credit cards and I don't buy anything unless I have cash for it. We use my husband's credit card to buy plane tickets and that's it. I have no idea what kind of credit card this is but you actually pay with the money you have on your bank account and the money is withdrawn instantly. So many people are victims of credit card manipulations. I hope they read this hub. Voted up!

    • sgbrown profile imageAUTHOR

      Sheila Brown 

      9 years ago from Southern Oklahoma

      We used a debit card for purchases when we had our business. I had already been in the debt settlement business for about 2 years and knew what the credit card companies were capable of. We had a TV action for a little over a year before we had to give it up. That was just about the time that the economy tanked. Thank you for your wonderful comment and votes! It is always appreciated. Have a great day! :)

    • dmop profile image


      9 years ago from Cambridge City, IN

      When I ran my business I used credit cards for every thing business related, it just made it easier to track expenses, but I paid the balance in full every month. Needless to say the credit card companies hated me. It actually saved me a substantial amount of money with gas savings and the purchase insurance and other little perks. I did get into a bit of trouble the last few years, because I was verily making a profit. I got out of the business before it got too bad and eventually paid off all my cards. I cut them up and threw them away, and haven't tried to get a new one since. I think credit in general is abused and causes far more problem than it solves. The only thing I owe on now is my house. I'm with you if I can't pay cash I don't need it. Great article; voted up, useful, and interesting.

    • sgbrown profile imageAUTHOR

      Sheila Brown 

      9 years ago from Southern Oklahoma

      Hello Finance Hub! Thank you for your kind words. I look forward to viewing your hubs. Welcome to HubPages, I'm sure you will like it here! :)

    • sgbrown profile imageAUTHOR

      Sheila Brown 

      9 years ago from Southern Oklahoma

      You are exactly right, Pat, you can't let your credit card get out of control. Please, be very careful and watch your interest rate, don't let it go up without you knowing about it. I have seen it happen, for no good reason. Thank you for commenting on my hub. Have a wonderful day!

    • profile image

      pat brown 

      9 years ago

      You have to control your credit card.We pay ours off every month.We get five percent off on gas and groceries and accumulate points that you can use for gift certificate or percent off your balance.You have to take charge of your card and not let the card control you.don't spend more than you can pay off monthly.I PUT OUR MONTHLY BILLS ON A CREDIT CARD AND PAY WITH ONE STAMP AND CHECK. PLEASE YOUNG PEOPLE USE CASH. CREDIT CARDS ARE SO EASY WITH I WANT- AND CHARGE WHAT YOU CAN'T AFFORD.THE BILL WILL COME IN AND YOU WILL SEE THE I WANTS AREN'T WORTH IT.


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