Credit cards are so nice to have because they are so convenient. See something you like in a department store and you can go right ahead and buy it, even if you have only ten dollars in your pocket.
And once you have successfully obtained one credit card you’ll be flooded with offers of more. So if you are a newcomer to the game you may find yourself the proud owner of ten or fifteen shiny new cards.
Wow, ten cards and a total credit line of anything up to $50,000. You feel so proud, so confident, everything you want is now within your reach. But, as you recklessly run up debt after debt, the day of reckoning is fast approaching. Your monthly income is now only enough to pay off one or two cards, but that’s all. So you start using your PIN number to draw cash from one to pay the next, and so on down the line. And when you have no PIN number your only option is to buy something on credit and sell it cheaply for cash – to pay off another credit card.
And every payment you make contains a hefty element of interest, because you are probably paying at least 2% a month on your total debt. So your money dwindles and dwindles, you realize that the game is up and stop paying.
Then the fun starts. Formal letters requesting payment, then demanding payment, then professional bill-collectors and finally legal action.
I’m sure that many people have found themselves in this situation. The temptation to use credit cards is so great that it is almost irresistible and once you start it’s difficult to stop. That’s why so many financial experts recommend that anyone with credit cards would be wise to destroy them. And that’s what I call good advice!
