Credit Cards offer false security

I learned my lesson at a young age, and I obviously didn’t learn my lesson well. To this day, I don’t own a single credit card; I do, however, own a lot of credit card debt.

Owning a credit card can be beneficial but can also be very dangerous. If you are not responsible with that little plastic card, you can find yourself swimming in a sea of debt that you are unable to break free of. Credit cards can come with a false security blanket and a high interest rate. Therefore, credit card owners must be careful with that plastic card.

The interest rate on a credit card is how the issuer makes money. Therefore, for every dollar you spend, they are getting a cut. That dollar is no longer just costing you a dollar. You are actually spending more money on that product then what the advertised price is. With an interest rate of 20 percent, you will find yourself paying $120 for a product that should have only cost you $100. If it takes you several months to pay off that debt, that $100 product will actually cost you much more than the initial $20. Easy math, I know, but until it stares you in the face, we really don’t see it. When you think of it that way, is it really worth it?

Interest rates can vary greatly from person to person. This depends on the consumer’s credit score, depends on the bank that issued the card, and depends on the card’s fine print. A card that starts out with a low APR could suddenly find an increase in the interest after a trial period. They will also occasionally raise the interest rate if the consumer pays the bill late. The tricks of the credit card company are all written in the fine print. Unfortunately, this small writing is sometimes ignored with the excitement of owning your very own debt producer.

The biggest problem with credit cards is the false sense of security that comes in the package. Too many times the credit card will be swiped for unnecessary purchases just because the consumer knows they are not at their limit. That pair of jeans or the new entertainment center is no longer a article you must save for, but one you can have immediately due to the convenience of a credit card. You have now taken out a loan for non-necessity type item, and it WILL cost you!

The credit card can be misleading. People start believing they have money when they actually don’t. It’s a false security. When people don’t physically have money, they are still able to make purchases. This is fake money. It isn’t real. By using this invisible money, you are creating yourself a pile of bills you will have to eventually pay back, with fees.

The lesson that should be taught - if you are one of those living the dangerous life of the credit card holder... Beware. If it isn’t used properly, you will become a victim, much like many others in this world. Financially, the downfalls of having a credit card can far outweigh the benefits. Yet, in today’s world, not having a credit card can be just as big of an issue!