When we speak of credit cards, what comes to mind right away? Can we say that because it exists that there is the potential to use it to spend on items? Yes. We like to spend on things we like, desire, wish and credit cards are the easiest way to accomplish that. This is why financial institutions created credit cards for the purpose of buying goods and services. The financial institutions know that consumers like to spend and why not give them a piece of plastic to do so then pay them back with interest.
Why do people use credit cards? Most people do not like to carry too much cash on them and it does not make sense to buy to high luxury without the use of credit cards. When it comes to shopping online, one cannot purchase products unless they have a valid credit card. The other reason of using credit cards is that most offer rewards such as cash back or points accumulated to eventually have enough to buy items with or travel. Financial institutions have performed research on consumer habits on what they buy and developed reward systems so that consumers keep on using credit cards for their purchase and spending. In a sense it is good for consumers to collect rewards; however, they have to watch their spending habits. In certain cases, it may take a great amount of spending to get enough reward points to get that free getaway trip or huge fuel saving card. As long as one spends wisely and uses credit cards responsibly then there will not be financial issues.
A lot of companies will want to offer you that Visa or MasterCard to use specifically for their business. One has to be very careful as having too many credit cards is not a good thing; especially when it comes to credit reporting. Why is it that in these times we hear that the average household has debt over the $20,000 mark? The problem is that the use of credit cards is so high that temptation leads to impulsive spending. Financial companies like that as they profit from the interest from the principal. The more that one has in their credit card, the higher the payment. We are not helping ourselves in this situation and the financial institutions are too happy to make money from us. Why do we let ourselves put ourselves in this situation? Do we really need that many credit cards? Is it worth it? We have to discipline ourselves in that we do not to compare to others who have the big items such as luxury cars, big homes, travel south every year.
Credit cards are here to stay and we need to control our use and dependence on them. We have to stop serving credit cards and put them in their place to serve us. If we need something, we have to ask ourselves if that something is really a necessity or a want. If it something that we cannot pay off within a month then we need to put into our mindset that we cannot afford it and forget about it. We have to stop comparing to others and imitation will just lead us to living beyond our means. Once we understand ourselves and live within our means then we can start to prioritize our lifestyle. Only we have the will to control our spending and ensure that it gets paid off on time. In the end, we want to be stress free and not worry about how much we still owe to the credit card.
I would like to hear from you and get feedback with regards to credit cards and if we as a society can beat this debt crisis. If we put ourselves into debt; surely there is a way to put ourselves out of it.