Using a credit card has become a very common way for a family to
pay for the items it needs and wants. According to CardWeb.com,
a firm that tracks the credit industry, the typical American
family of four carries about $8,100 in installment debt-most of
it in credit cards. At 18% interest, that costs them nearly
$1,500 a year or $125 a month they can't spend or save for
anything else.
How many credit cards do you currently have?
* Make a list of all of your bank cards, travel and
entertainment cards, department store cards and gas cards. Are
you surprised at how many you actually have? * Now list beside
each one, who issued the credit card.
* Now list your credit limit next to each credit card. * Now
list your credit debt associated with each credit card. * Is
your total debt more than 25% of your total credit line? If so,
you are using your credit cards more than you should and getting
more credit cards is not the answer.
* Now list the annual fees associated with each credit card. *
Next, list the interest rate next to each credit card. * Now,
add up all of the annual fees for all of those credit cards.
* Now, for each credit card, multiply the debt on that credit
card by the amount of interest rate for that credit card. Then,
total that up for all the credit cards. * Add that figure to the
total amount of annual fees you are paying on all your credit
cards.
* That is the amount of money you are paying out each year for
the "privilege" of having all those credit cards.
Jennifer Tarzian, of http://youngparentsmagazine.com says one
question that gets asked often is "What are the advantages to
having credit cards? We hear all about the disadvantages, but
what are some reasons why I might want a credit card?
Credit cards can help you build a positive credit history. This
can enhance your ability to receive a private student loan, buy
a car, rent an apartment, get a job, and buy a house.
Security in emergencies; I'm sure you know all about Hurricane
Katrina that hit New Orleans and devastated so many families.
Most of them were caught unaware and those that could afford to,
had to scramble to find hotel accommodations for their families,
food, and other necessities. In a disaster like that one, having
a credit card would be essential to protecting your family and
for your own survival.
Reduced need to carry cash or checks; If you are robbed or just
lose your wallet, you can't call and cancel cash. A credit card
or even a debit card can help you avoid carrying large amounts
of cash, especially when travelling.
Enhanced personal responsibility and independence. For young
parents, college students, and others just getting started,
having credit cards can help you make ends meet and gives you a
sort of independence and even prestige and respectability.
However, only one national card like a "Visa" or a "MasterCard"
is necessary to receive these benefits. If the stores where you
shop already accept the major credit cards, you do not also need
a credit card for their store. This can lead to you spending
more than you can afford.
At http://creditcards.youngparentsmagazine.com , Jennifer
Tarzian offers help in choosing credit cards, how to reduce
credit card debt, how to prevent identity theft, what to do if
your credit card is stolen, and a lot more.
She advises young parents to beware of too many offers you get
via mail, email, and by phone. Credit card issuers often tempt
consumers into carrying more debt than their income justifies.
Then, when the customer is drowning in debt -- stumbling to make
even the minimum payment -- they will pile on late fees, jack up
interest rates and begin what often becomes a crescendo of
collection calls. So be very careful. You only need one or two
credit cards if you plan to control how much you owe.
About the author:
For more information about how to obtain credit cards, credit
reports, reduce credit card debt, or prevent Identity Theft, go
to http://creditcards.youngparentsmagazine.com Jennifer Tarzian
also has a lot of information at
http://www.youngparentsmagazine.com for young parents. Chris
McElroy has been an advocate for consumer rights on the Internet
since 1995 and also runs a missing children's organization at
http://www.kidsearchnetwork.org
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