Credit Cards: How to Use Them Wisely
If you are looking for credit cards you’ve came to the right place. This is exactly where you will find out why you don’t need one. Yes, you’ve got that right. Actually I am going to persuade you to live your life free from credit cards.
Let’s face it. Credit cards have not been designed to make our life easier, or to take care of us customers. They do not exist for our benefit, to make our lives richer, to help us become prosperous, or to enable us to have financial freedom. Nope.
Credit cards were created to make banks richer, let lenders take advantage of us easily, and literally enslave us to the system.
You may be thinking that I have gone too far, but let me prove my point to you.
Do We Really Need Credit Cards?
So, why do you think you need that plastic? What is the first thing you are going to do with it?
I once was eager to have a credit card. I thought that I’d be able to spend money now (mostly for emergencies, of course) and easily pay back later during the grace period. I’d be able to build a perfect credit history and easily do my shopping over the Internet without putting my checking account at risk.
What else could I do with a credit card? I could take advantage of low rate credit cards and gas savings credit cards, earn reward points, use free air miles, and enjoy huge discounts at an array of hotels and restaurants. Of course I also would have the freedom of using 120,000 VISA ATM machines worldwide. This would mean that I could always get cash from my credit line at any place in the world.
Real Cost of Credit
Let me tell you, I was very naïve. There is no financial freedom or increased spending power that comes with credit cards. Do you know what happens to most people who have credit cards? They charge and charge buying things that they don’t have the money to pay for. Within a matter of weeks or months, you could find yourself thousands of dollars in debt. It’s so easy to get there.
And the only option to stay afloat is to pay minimum payments that are usually between two and four percent of the current balance amount. Let’s take a look what happens when you find yourself in this situation.
Here’s an example. My current balance is $8,000 and I am paying the minimum payment with 12 percent APR. I stop using the card altogether. It would take me nearly six years to pay off a balance of $11,146, which is over $3,000 more than I originally charged on the card! And remember, that’s if I stopped using the card. Imagine how high the balance would be to pay off if I was still using the card and charging things?
And you know what? You may be surprised, but that means I paid my lender 39 percent interest on the amount I borrowed in a credit lifetime. In other words I paid an additional 39 cents on each dollar I spent. What a great deal for that lender. But boy, it was the dumbest decision I ever made.
I received no benefits from the deal. My freedom was restricted because my options of spending my own money were narrowed by my obligation to pay the lender. The products and services I bought lost their value long before I paid off the card. I spent my time working for the lender without gaining anything in return. Does this sound like slavery to you? It sure does to me!
We all have been told countless times that we need credit cards to exercise our financial freedom, to create a credit history, to be safe online, etc.
And the truth is we don’t need a card to have the freedom of spending our own money, we don’t need a card to build a credit history; we don’t need a card for online shopping, we don’t need rebate cards, merchant cards, and airline cards because their benefits are designed to make us spend more and do so more frequently.
And if you still want one after all this, then let me teach you how to evaluate credit card offers to choose the one that’s best for you.