Credit Card Use by Shopaholics: One's Too Many, a Hundred's Not Enough
Contributed by Alix Mcmurray
Credit Card Use by Shopaholics: One's Too Many, a Hundred's Not Enough
A credit card in the wrong hands can be a lethal weapon -- financially lethal. But ask any self-proclaimed shopaholic, and they'll tell you they look down the barrel of that gun on almost a daily basis.
Recognizing the Credit Card is Not the Problem, but the Person Holding It
Having a credit card can set the consumer on the road to a solid credit rating, an invaluable tool in purchasing a home. But the freedom to "buy now and pay later," particularly for the first-time card holder, is extremely seductive. Impulse buys are difficult to resist, particularly with the hype that normally accompanies them.
Friday and Saturday Only! Deep Discount! Everything Must Go! Pay Nothing until Next Year! Instant In-Store Credit! While the pleasure of buying something special -- a plasma television, a new dining set, a string of freshwater pearls -- can seem like a good idea at the time, like many impulses, it is often wiser to say, "No! " You'll feel better in the morning.
All Things in Moderation, Even Using That Credit Card!
Opinions vary as to how much credit a consumer should extend to him or herself through credit card use. Some debt counseling organizations suggest charging up to an amount no more than 20 percent of one's earned monthly income. This makes it possible to pay off the bill in full when it comes, and avoid finance charges on a standing balance.
But that is not always possible or desirable, particularly if you've succumbed to having your credit limit raised by invitation of the credit card company itself. These invitations typically come in the mail with some handy "personal" checks to be used like bank checks but chargeable to the credit account.
