Credit cards are the most common means of payments in developed countries. Almost everyone has a credit card in a country like the united states. This means the society is cashless. Unlike in underdeveloped countries where cash is the primary form of payment for goods and services. In the united states, you can have a variety of card types. Credit card issuing companies vie for your patronage of their type of cards. This is why you see so many adverts on credit cards everywhere you go.
A credit card is a financial arrangement between you, the consumer or the card holder, and an institution such as a bank. The arrangement specifies that you borrow money from the lending institution with the promise that you will pay them back in the future. The institution agrees that it will provide the money you need and in-turn you are expected to return payment over a certain period of time. Your payment will include not just the amount of money you borrowed, but also an additional charge based on a pre-defined rate of interest. The charge goes to the institution that gave you credit in the first place.
Here are some very important pros for Credit cards:
1. Convenience
2. Emergency protection
3. Security
4. Traveling
Let's look at these points more closely.
CONVENIENCE; First and foremost, credit cards offer you the convenience of shopping on the web. You are browsing a website and you see something You desire. You just type in your card number and other necesary details and you can have the item delivered to your door. This is done without leaving your home. This same situation happens if you are out shopping in the mall. credit cards prevents the incovenience of carrying so much cash around.
Emergency Protection. Credit cards can also rescue you from emergency situations. Find yourself in a situation where there is no cash available, whip out your credit card and solve the problem immediately.
Putting you in the right budget. Want to keep a detailed record of your expenditures? Credit cards can do that.
SECURITY. Credit cards also provide a great deal amount of security. You can carry a large amont of money in a small card instead of cash. Carrying cash around is an open invitation for thieves and robbers to attack you. Also if your cash is lost ,returning it is largely dependent on a good samaritan. But for a lost credit card, all you do is just report the loss and and ask for a termination or cancellation. A new one will be replaced for you.
TRAVELING. Credit cards can be most useful when you are traveling. Whether it is within or outside the country. You can make your purchases anywhere it is accepted. This saves you the inconvenience of carrying large amounts of cash when traveling.
Credit card add a lot of convenience to our lives. It can also be a source of misery for us when not handled properly. First, we need to keep our credit card details safe . With all the identity theft going on, this cannot be overemphasised. Also we must keep track of our purchases so as not to run into serious debt. Running into credit card debt is easy but managing the debt is another problem entirely.
THere are some simple tips to help you cope with your credit card debt:
Make a Budget and try to stick to it.
One way to really get to grips with your debt is to make a budget. Now, one thing is to make a budget another is to stick to it. To have a good budget, first list out the most essential things you need. You need not want! Then the next most important and so on. This way you get to take care of your basic needs first so that you don't run out of money before these essentials are taken care of. One other way to keep within your budget is to forego one thing for the other. If for example you suddenly have the urge to buy something that is not within your budget or is not a necesity but will upset your budget, then remove some other item that you think you can do without that is in your budget. This way you are substituting one item for another.
Talk with Your Creditors.
When you have gone over your credit limit or you are in debt, discuss the situation with your creditors. Staying away from them won't solve the debt problem because the debt won't go away. You must avoid the involvement of debt collectors or cedit agencies. Your creditors will normally resort to an agency when they have given up on you. Talk to your creditors and have them revise your payments so as to allow you more time to meet your debt obligations.
Educate yourself on the law regarding Debt Collectors.
There is a law that gives certain conditions for debt collectors as to when and how they should ask you to pay. The federal law, Fair Debt Collection Practices Act, clearly states that those collecting debts may not bug you, give false assertions, or do practices that are not fair when they are getting to collect money from you.
Consider Credit Counseling.
There are aid groups or institutions that could help you in debt situations. They give credit counselling. By approaching these organizations and getting a good payment arrangement for your debt, you could receive a favourable consideration from you creditors on a modified payment plan.
Declare personal Bankruptcy.
This is no way to go. However. it is legal to do so. But the consequence is rejection in almost anything to do with credit for years to come because it stains your financial records.
Always be aware of the good and bad sides of credit cards so that your life can be a whole lot better with it.
The author, Salihu Ibrahim, has written many prolific debt improvement articles at his bad car credit loans that will save you a some headaches and you can find many other tips on relevant topics concerning loan reduction, debt consolidation, home-improvement and home buying at his websites http://www.loans-n-debts.com and http://www.home-improvement-tipsonline.com