- Personal Finance»
- Managing Credit Cards & Payment Options
Top 7 Deadly Sins of Credit Card Use
Are you committing a credit card sin? As alluded to by many financial pundits and gurus, credit cards have its good and bad uses. Demonized in the financial media lately, credit cards have been perhaps the number one cause of personal financial abnormalities. Conversely, the main thing you want to remember about credit card sins is this: They mainly come in the form of seven. Thus by its own admission, (or like any other financial product that consumers tend to inadvertently abuse) has overtime managed to get consumers into very deep trouble. A financial hell hole of sort: With this being the case, you can make the argument that improper credit card use, (along with its ability to create a massive debt load) is one of the perennial issues addressed by most credit professionals, including credit counselors, credit repair lawyers and, of course debt specialists. The following list below represent seven of the top deadly credit card sins, as committed by consumers:
Sin# 7 Allowing Pride to Cloud Sound Financial Judgement…
Perhaps a peccadillo more so than a sin, consumers who allow pride to get in the way of his or her own better judgement has also allowed excessive debt to creep into their personal finances. Case in point: Mary Staples, a California native who says that when she was a broke college student, she was too prideful to ask her family for help paying for college expenses (i.e., textbooks, food clothes, utilities, etc.) "I'd just charge it on my credit card. I wanted to feel like I was fine, like I could make it on my own," says Staples, who had well over 10 credit cards and, at one point, owed over $30,000. "If I had asked for help back then or just admitted I couldn't afford certain things, I probably wouldn't have accumulated so much credit card debt." Pride could also be a top reason consumers in financial trouble don’t seek help from lenders or credit professional, says Richardson. “People are very reluctant to discuss financial distress—they think, “I can do this on my own.”
Sin# 6 Using Vengeance to Get in Deep Financial Trouble…
Vengeance can cause big problems to your personal finances, especially when an individual uses credit cards as a kind of weapon of mass destruction—namely, to get back at a spouse or lover. Personal finance experts have rightfully given this phenomenon the title of “Revenge Spending.” Jack Caldwell, who is a credit counselor for CCAC talks of having a client that used revenge spending to get back at his wife’s excessive online spending habits. Caldwell recalls, the wife being addicted to shopping on Amazon and had filled a closet with purchases she hid from her husband. "When the husband did find out, the way he got even was to go out and buy a Harley Davidson," Caldwell says. Going from spending on frivolous online consumer goods to a purchasing a big ticket item of some kind typically backfires in the form of excessive debt, which as all know is a precursor to deep financial trouble.
Sin# 5 Allowing Laziness to Pile on the Fees…
It pays not to be too slothful when in the presence of credit cards. The reason: Consumers who exhibit such behavior end up paying for it in the end. If you think about it for a moment; that is, to say, if you’re a kind of lazy person when it comes to your personal finances, you’ll: 1) Lack the kind of clarity to read the find prints of your cardholder statements; 2) End up paying the highest possible interest rates; and more importantly 3) You’ll slowly begin to rack up hidden fees, for which so many credit card companies have been made famous for. The moral adage: It pays not to be too lazy. “I was too lazy to look at my statements and be on top of what was going on, “Johnson says. As a side note: Most personal financial experts will recommend that to open credit card statements as soon as they arrive, scrutinize them to spot any added fees, mistakes or fraudulent charges—then pay the bill right away. “If you’re really lazy about getting organize, that’s a real problem,” says Raymond, a credit counselor at CCAC.
Sin# 4 Allowing lust to Get the Better of your Senses…
Lust. Just the thought of the word conjures images of some kind of insatiable desire. But in the realm of personal finances, the definition of the word means very little, especially if you allow it to get the better of your senses—to be exact, the concept of consumer lust can get you very deep into financial trouble. "There's just this lust for more-- this internal desire to have the coolest and the best consumer goods and services," Staples says.
As a kind of moral imperative, most financial experts recommend waiting until you have the necessary amount of cash to pay for most consumer goods and services.
Sin# 3 Being Green with Envy to point of Temptation
As a general rule, consumers with credit cards should never covet shiny items bought by friends, family and neighbors. This can lead a cardholder to credit card temptation! "We're hugely susceptible to watching other people spend more and saying 'I want to do that too,’ "Caldwell says. "You watch your favorite actor on T.V. walking down the red carpet at the Oscars, and by noon the next day there will be consumers looking for stores selling knockoffs.” Caldwell's advice: “Only buy a coveted item with your credit card if you can pay it off right away. "You aren't going to be the envy of anyone if you go into debt," he adds.
Sin#2 Being Overwhelmed by Gluttony…
There's very little doubt consumers often overindulge. In fact, when you compare America’s appetite for opulence, the end result is a higher than average obesity rate. It becomes easier and easier to finance this gluttony with credit cards, according to Caldwell. The moral of the story is this: "If you can't buy a candy bar with cash, then chances are you don't really need it." America’s overindulgences is at an all-time high, as many Americans use credit cards to finance small self- indulgences on a daily basis.
Sin#1 When it Comes to Credit Cards, Greed isn’t Something Good…
When it comes to packing on massive amounts of debt, nothing can get more sinister than the very egregious concept of greed. As perhaps made famous by the movie Wallstreet, when it comes down to it, using greed as a motivating factor from within your personal finances is never really a good thing. To say the least, consumers who get bitten by the greed bug seems to possess an acute desire for abject materialism, which is not only sin, but could be considered borderline blasphemy in the world of personal finances, acting as a natural impediment to financial growth.
Melinda Jamison, a certified public accountant in New York City, says that after a divorce a few years ago, she racked up a debt of more than $28,000 on five credit cards. She admits to succumbing to almost every credit card sin, including greed, which happens to be the worst of them all. "I would dine at some of the fanciest eateries in town, and then follow that up with even fancier shopping sprees," Jamison says. Her most frivolous purchases: Shoes, shoes and more shoes. “I really felt the need to have designer three-and-a-half-inch stilettos," she adds.
Alas, for consumers tempted by the sins of excessive credit card use, Jack Caldwell, president for public relations at CCAC recommends a financial reality check. "It's important to take an honest look at your finances, admit you have a limited amount of money, and make important choices about how to spend it," he adds. "Being financially sinful can lead to credit ruins.”