June 2,2009
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Using CC's Wisely, Pt.1
Consumers and CC Companies Lose.Identity theft and credit card fraud have become the number one focus for criminals as well as innocent victims. The news media reports of such fraud are released on a daily basis. Most likely this fraud is an hourly occurrence. Even more frightening is knowing that these are the only publicly reported cases. There are many more cases that have not yet been discovered or released to the public. Consumers suffer tragic results from these violations of privacy and it often takes months to clean up the mess and repair the damage to their credit scores. When certain precautions are taken, much of this fraud could be potentially deterred. Consumers need to be attentive to their business and smart in managing their credit cards.
Using cards wisely also includes managing spending and debt. Consumers tend to make more impulse buys when using their credit card. It's easy to think the money will be in the bank to pay the bill in 45 days and just as easy to let it slip by. Suddenly one day the bill arrives in the mail and oops, there's not enough money left to pay if off. You pay the minimum payment due and expect by next month you'll have the balance. But what happens in between? The same pattern repeats itself. Impulse buys, 45 days to pay, time slips by, bill arrives, not enough money in the bank, and once again you pay the minimum. Month after month, the same cycle occurs and before long the consumer finds himself in a never ending path to credit card debt.
Choosing the wrong credit card can also add to debt problems. Some companies market some very inviting offers for rewards and teaser interest rates that end up costing the consumer more in the long run. All of these traps are dangerous and add to the consumer getting caught up in a debt mess. To avoid the pitfalls, consumers should follow some basic steps in using cards wisely.