Credit Cards-What Every Consumer Should Know

November 14, 2011 by  
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According to recent studies, consumers stay with their original company and continue to use these credit cards an average of 15 to 17 years after first signing up with them. Therefore it is by no coincidence that credit card companies will target young people as potential customers. It’s also probably safe to say that the sooner they can get these young people (before they are properly educated on credit cards) the longer they will have them. Rather then discussing some of the tactics credit card companies will use to get new young customers, let’s just dive right in and talk about what every consumer should understand right from the beginning in order for them to avoid the need for credit consolidation services.

The Pro’s And Cons Of Using Credit Cards.

Lets jump right in and start this discussion with the pros and cons of using credit cards.  A few of the advantages would be in case of an emergency you would have the ability to get what you need, and there is no doubt that this is huge. It is definitely safer then carrying cash. If lost or stolen your cards are protected and you will get them back. Unfortunately, we cannot say the same with cash. This also will give every consumer their proof of purchase. I cannot tell you how many receipts I have lost over the years especially when Christmas shopping. I think everyone will also agree that they are more convenient then writing out checks all the time. Another great option for consumers with using credit cards is the ability to consolidate some of their debts. By combining all of their higher interest rate cards onto a lower one is a huge advantage for consumers who are in good standings with their credit card companies. I’m sure everyone can think of more pros but we just wanted to list some of the most common ones.

Now lets discuss some of the cons with using credit cards. The first one of course would be the interest rates that are applied. If you purchased a $600.00 dollar item on a card charging you 15% and only paid the monthly minimum that could take you roughly 7 years to pay off. That is definitely not a turn on. Add that to the next disadvantage of increase impulse buys and that could lead to financial trouble. Most people will more easily buy on impulse when carrying a card then when they are using cash. Another disadvantage of using credit cards is the additional fees that can arise from them. Whether it’s a monthly surcharge fee, late fees or over charge fees, these can really add up upon the life of the card. Now if you put these cons on multiple cards you can see how easily it can cause financial ruin for any consumer when they do not use them wisely. Thankfully, there are very good credit card debt relief companies available for people who run into these types of problems.

Credit Cards-Consumers Responsibilities

Credit cards come with responsibilities that every consumer should adhere to. Buying on impulse should be put at the top of everyone’s list and is definitely a no-no. Never buy more then you can afford to pay back also belongs at the top of the list. For example, do you really need that 52’ flat screen as opposed to the 36” or 42”.  You should always pay you bill on time, and if something should come up always notify your creditors right away. Every consumer should strongly understand his or her credit agreement and contract. Remember this, you can never use “I did not know” as an excuse, as it will not work.  Finally, do not delay contacting your creditors if your credit cards are lost or stolen. You must report this as soon as it happens or once you realize it.

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