Authored by Susan Langley, 23 Years with ECU Credit Union and 35+ years in the financial industry. "People helping people and working for our members not stock holders is why I love my job."
People who consider a credit card "free money" are headed for trouble. I have found if you cannot pay your Credit Card balance in full every month you should not charge it. Don’t be enticed to use your card to make a purchase just to earn Reward points unless you have the self-discipline to pay your credit card off every month or you may find yourself in trouble. Here's an example:
Hired as a co-op student at a credit union, Heather worked hard and received a promotion. She wanted new clothes, so she applied for a credit card.
Heather paid the minimum monthly payment each month. Because of her payment record, the credit union agreed to raise her credit limit. Heather was off to Jamaica, where she used her credit card a lot.
Heather paid down her credit card debt, then ran the balance up again--again and again. Five years later, Heather owed more than $5,000--and, technically, she still was paying for her Jamaica trip. It took Heather almost 12 years to finally paid off her credit card debt! Not only did she pay triple the amount charged, she was unable to save money.
I feel credit card debt is one of the easiest ways to get yourself into financial trouble my advice is to be wary of the introductory and pre-approved offers, take your cards and place them in a secure inconvenient place and use them for emergency purchases only. If the card is convenient to access you may fall for impulse buying.
Start slowly with your first credit card. A smart money management rule is to avoid paying interest on your credit card charges by paying the balance in full each month. That way you'll enjoy the convenience a credit card can bring, while avoiding unnecessary finance charges and debt that never seem to end.
What advice do you have for Heather?
Hired as a co-op student at a credit union, Heather worked hard and received a promotion. She wanted new clothes, so she applied for a credit card.
Heather paid the minimum monthly payment each month. Because of her payment record, the credit union agreed to raise her credit limit. Heather was off to Jamaica, where she used her credit card a lot.
Heather paid down her credit card debt, then ran the balance up again--again and again. Five years later, Heather owed more than $5,000--and, technically, she still was paying for her Jamaica trip. It took Heather almost 12 years to finally paid off her credit card debt! Not only did she pay triple the amount charged, she was unable to save money.
I feel credit card debt is one of the easiest ways to get yourself into financial trouble my advice is to be wary of the introductory and pre-approved offers, take your cards and place them in a secure inconvenient place and use them for emergency purchases only. If the card is convenient to access you may fall for impulse buying.
Start slowly with your first credit card. A smart money management rule is to avoid paying interest on your credit card charges by paying the balance in full each month. That way you'll enjoy the convenience a credit card can bring, while avoiding unnecessary finance charges and debt that never seem to end.
What advice do you have for Heather?
