Credit Card Debt Management

Even though the new credit card reform bill is meant to help consumers, companies are finding new ways to make money. There are many ways they are doing this, and if you carry a credit card you need to be aware of each and every one.

To start, rate hikes are not out of the question. In other words, you may find your interest rate climbing through the ceiling in the months to come. Credit card companies know that doing this can make them a lot of money because most consumers carry over a balance from month to month. Believe it or not, some consumers have found their rate increased to as much as 36 percent. What would that do to your balance?

What about new fees? This is also something that credit card companies are looking into. For instance, Fifth Third Bank is charging an inactivity fee of $19 on accounts that are not used for 12 consecutive months. So if you think you are putting away your credit card to keep safe, you may be wrong.

Some credit card companies are increasing the minimum monthly payment. In many cases this has gone from two percent of the balance to five percent. This translates to a lot of money per month for consumers with high balances.

The only good thing is that your credit card company has to make you aware of these issues in writing. In other words, you will know what is coming before it gets there. If you don’t like what you see, call your credit card company for clarification. And always remember that you have the right to cancel your account or transfer your balance to another card. 

No matter what, there will always be people who think that credit cards are evil. They have a reason for this. Maybe they have heard horror stories from outsiders. Maybe they have used credit cards irresponsibly in the past. While there is some bad that can go along with using plastic, you have to remember one thing: they can benefit you in many ways as well. So before you write off credit cards altogether, you need to think long and hard about what you will be missing out on.

There is nothing to be afraid of if you are responsible – it is just that simple. As long as you do not abuse the power of your credit card you will be able to get along with it just fine. The issues come into play when you begin to think you can use your credit card for every purchase without thinking about the future ramifications.

The main thing to be afraid of is racking up a huge bill with no way to pay it. When you use cash you don’t have to worry about this because you can only spend what you have. With a credit card you have to keep your mind clear because your limit is probably higher than what you can comfortably afford to pay.

If you are scared of credit cards you may be best off staying away for the time being. There is no reason to bring fear into your financial life if you do not have to. Instead, wait for a while before you apply for your first (or another) credit card. This will give you a chance to realize the pros and cons, as well as whether or not this is the right financial choice for you.

How many credit cards do you have in your wallet or purse? Do you only have one? Do you have three or more? Five or more? Believe it or not, some people have a fistful of credit cards. Some of them have no idea what they are all for, or when the last time was that they used them. There is nothing wrong with having a few credit cards, but at some point you need to get organized to ensure that you do not cause yourself future issues.

There is no right or wrong number of credit cards. If you only want one card there is nothing wrong with this. On the other hand, if you want to carry a few you can get away with this as well. But one thing is for sure: no matter how many credit cards you have you better be responsible day in and day out. More credit means a better chance of finding yourself in financial disarray.

Start with one credit card. This will give you a good idea of what goes into using credit, how to control your debt, and much more. From there, if you decide to add another credit card you will feel comfortable doing so. The last thing you want to do is apply for several cards at the same time – this will just confuse your situation.

There are two main categories of credit cards. The type you get from companies such as VISA and MasterCard, and those that are available through department stores such as Macys. Although you may think there are many differences, the fact of the matter remains that they work in exactly the same way.

So, how many credit cards do you have? Too many or not enough?