I’m not even sure what interests rates are right now, because I don’t use credit cards. I do know that most are somewhere around 20% unless the credit card company is conducting a special offer. Let’s just say 20% since it’s a nice round number. That means for every $100.00 you borrow, you’ll have to repay at least $120.00. That adds up quickly!
Many American families spend beyond their means and are currently experiencing dangerous levels of credit card debt. Once a family or an individual gets to a certain point, there is no easy way to resolve the debt. Late fees add up, and interest is calculated against those fees as well. Eventually, you may get to the point where the card is maxed out and then you’ll not only be hit with late fees but over-limit fees as well.
These fees are frequently about $30.00 each, for a total of an extra $60.00 per month being added to your balance. If you are only making the minimum payment, you will never pay off the debt, and fees will continue to be added. In a year’s time, that’s an additional $720.00 that you will have to pay. I can think of much better ways to spend $720.00, and actually have something to show for that money.
If you are currently experiencing credit card trouble, consider consulting with a credit counselor. Beware debt consolidation companies, which claim to be “free” but actually charge for their services. Research debt consolidation companies carefully before you consider signing up with one.
If you are currently in good shape with your credit, stay that way by cutting up your cards. Get rid of all of them, except maybe one that has low interest and no annual fee, to keep for emergencies. The convenience of a credit card can still be enjoyed by using a MasterCard or Visa debit card issued by your bank. You can use it most places that accept credit cards, but you’ll only spend money that you have in your account, instead of spending beyond your means. Best of all, you won’t be paying interest, which is one of the greatest sources of debt for many people.