Credit Cards – Wish I had Known This Sooner!
Chinese people invented many helpful things such as gunpowder, paper money, chopsticks and umbrellas. Unfortunately as per the Chinese, they did not devise the idea of using plastic in the place of money. We can thank early American capitalists for that idea.
From the time John Biggins, the inventor of a first bank issued card, had his first eureka moment in 1946, credit cards have evolved to become one of the most versatile ways of paying, and this is why.
Once issued with one, the need to carry around unsafe, dirty and bulky cash is significantly diminished. I say diminished because some small scale merchants (who perhaps are scared of technology) will still insist on being paid in cash. Further, credit cards enable you to build up a credit history, but only if you always pay on time.
In some countries such as UK, if you buy goods using a credit card and the goods turn out to be faulty, they are usually insured for a period of time, say two months, and you can be indemnified even for total loss. Credit cards are safe, and even if gun-totting miscreants help themselves to your wallet, you can make hit back by simply calling the credit card company and canceling the stolen card. Another thing going for credit cards is that you can keep track of your transactions, and it’s thus easy to keep track of your expenditure.
Does the credit card work for you or do you work for your credit card? Most people’s answer to that question will depend on how they treat their ‘old plastic’ as credit cards are known.
For many with burned fingers will tell you they didn’t realize that things had gotten so bad until very late, because most credit card offers try to sound like they are actually running a charity. Well, they aren’t.
And this is not a hate campaign against credit cards.
They certainly have their benefits; American car rental companies require a major credit card before you are allowed to rent a car.
But, consider this scenario:
Often you generate an offer in the mail that sounds nice, maybe a new style TV or fridge. But the cost is $2000. But wait, you have a credit card that has a $5000 limit, and without thinking purchase the item. Usually, this is how your repayment schedule will work out. Most credit cards charge a minimum of the total balance, usually being two percent, of the total per month. If the interest rate is 18 percent and you only choose to repay that minimum amount of $40, then $30 of that will go towards your interest and a mere 10 percent towards the actual principle. Furthermore, it will take you 30 years to repay it and you will end up paying over $5000 in interest.
Sounds scary It doesn’t have to be. The moral of the illustration is use the credit card the same way porcupines make love; very, very carefully. Be sure to read all the small print when completing credit card apps.
Nevertheless, credit cards are here forever, no matter what the doomsayers are telling you.
Find articles covering every topic related to credit cards at Credit-CardGuides.com, a virtual credit card clearinghouse chockful of helpful information on choosing the credit card offers that best meet your needs, as well as links to low APR credit card apps and the most popularunsecured credit card applications .
- Daniel Wright
