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The Lure of Credit Cards, Hate It or Love It?

Credit cards, plastic money, advance cash, whatever you call it; many people are attracted to its many benefits.  It gives the cardholder the ability to make instant purchases, even if they don’t have any money to spend.

In principle, credit cards are this century’s most powerful tool.  It allows people to purchase a lot of things from food, clothing, cars and travel.  You can also use it to pay the rent and in some cases, the deposit for your real estate purchase.

The love-hate relationship with your credit card starts when you can no longer afford to pay your purchases, especially if the accrued interest has blown out of proportion.  I’ve seen many people who earn big bucks faced with a mountain of debts due to their credit card purchases.  They started with purchases they can initially afford.  However, after maximizing their credit card limits, they realize that they spent way too much than they can actually afford.  It will take several months’ salary and sometimes several years’ income to pay for it.

However, the problem doesn’t stop there.  It is like an addiction that is hard to control.  Even if people realize that they are faced with a lot of debts, they are still lured to apply for more credit cards.  It can come to a point that it is almost impossible to pay for the total accumulated debt.

Overall, most debt counselors would recommend getting rid of credit cards.  However, in my opinion it is good to have one for as long as you know how to control it and it doesn’t control you.  For instance, don’t make any purchases that you can’t pay off without incurring any interest.  Take advantage of using it for big ticket purchases where you can convert the accumulated points for free travel or even gift cards.

In the end, if you can manage to handle your credit card debt, then you’re one step closer to owning your own home.  You won’t only show your potential lenders that you have  a good credit history, but you have the discipline in managing your debts, income and expenditures.

What’s your credit card experience? Do you love owning one or do you hate the debts that came with using it?

Foto Source:  Flicker.com by ralphbijker

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