For Appleton and Outagamie, Wisconsin, residents, receiving their first credit card can be very exciting. However, plastic money with all its perks and privileges also has its drawbacks. Taking credit cards for granted can cause mountainous bills that not only affect a person’s financial standing but everyday life as well. For this reason, first-time credit card holders should keep the following tips in mind.
Credit card interest rates can be costly. Often, credit card holders pay a balance. This means that each purchase incurs interest from the day an item is purchased to the day it is paid. Sadly, interest rates don’t come cheap and a person will ultimately pay a lot more that what is stated in the receipt.
Another thing to consider is that credit card companies often include other fees. For one, there is the annual fee and transaction fee. Other possible fees are late fees and cash advance fees. Furthermore, credit cards have an enticing effect that makes people buy typically unaffordable items on a cash basis. Card holders may overestimate their capacity to pay because of the financing schemes that credit card companies offer.
Failure to consider these points can lead to credit card debt. This kind of debt can easily get out of hand and not doing anything about it could make it even worse. Wage garnishment could be a distinct possibility for card holders, compounding their woes. It is understood that not all people who are in debt are in debt due to their lavish spending habits. Some people have incurred debts because of medical bills and educational expenses, such as student loans. Nevertheless, eliminating debt is still quite a challenge no matter what the source of the debt.
Colorado, residents may find that filing for bankruptcy can be an effective solution to their credit card woes. A debt relief specialist can assist a debtor in assessing their eligibility for bankruptcy qualifications as well as address questions concerning possible legal options for debt relief.
Source: Yahoo Finance “5 Things About Credit Card Your Parents Didn’t Tell You,” Jason Steele, July 18, 2013