There are pros and cons in everything. Let’s take credit cards, for instance. Credit cards are wonderful tools that allow you transact without carrying wads of cash. However, it’s also very easy to get carried away and swipe without considering available funds to cover the purchase. while a credit card is a wonderful tool, it could also lead to financial woes. This is particularly important in this time of financial difficulty.
I must say that the problem isn’t limited to credit cards, but applies to all aspects of financial life where lack of control often leads to catastrophe. Credit card collection agents are now using “creative” ways of collecting unpaid credit card obligations, which resulted to the issuance of guidelines against unreasonable collection practices. Those who cannot pay or have a difficulty in paying are complaining against these practices, although all agree that a debt is a debt, and must be paid. The solution, really, is moderation and control. Spend within your limit. As always, it’s always easier said than done.
Pay all your purchases for the last billing cycle. The beauty of credit cards, for some, is to be able to buy something which you couldn’t otherwise buy with your existing money, then pay only a minimum amount per month. However, when you pay only the minimum amount, you end up paying interest charges for the rest of the amount. In other words, you must pay all the amount purchased in the previous billing cycle. You’re a “deadwood,” which is simply a term used by credit card companies to refer to those who pay the entire amount on or before the due date. Credit card companies still earn from dead woods — through the margin they receive from merchants or sellers. (The rest of the tips are discussed at Pinoy-Business.com. Click here to read).
