Credit Card Hazards That Can Cripple Your Finances

You are pre-approved! Every time I check my mail there is at

least one or two pre-approved credit card applications. You get

them too, I'm sure. You can even have terrible credit and they

still continue to flood your mailbox. And if you just filed

bankruptcy you will get more of them than you know what to do

with!

Credit card debt is so easy to get into–over and over again.

Most people don't feel like they are spending real money until

the bill comes, and then it's too late. The credit card

companies know how to make it very tempting to fall back on any

good habits we've created and just spend away. It's hard to get

away from, but we have to resist temptation.

When establishing good credit, one of the things we're told to

do is to get a credit card and then use it to spend wisely.

Experts advise us to pay our bills on time and not to exceed the

credit limit. However, no one really talks to us when we get

that first card about how easily and quickly we hit that limit,

or how easy it is to miss that first monthly payment. Once you

get behind, it can be really hard to catch up. Oftentimes,

credit cards come with introductory interest rates that are

nothing or very low. But many times, those rates soon change and

you can find yourself with a full balance on your card with an

18 or 20 percent interest rate! That interest rate can then put

you over your limit, if your not paying at least the minimum

payment, now making you susceptible to over-the-limit fees.

Before you know it, you are getting bad reports on your credit

reports for credit card debt on a card that you haven't even had

very long.

Unfortunately, when times are hard, abusing credit cards is all

too easy. When the economy is bad and cash is tight, it is all

too easy to put your daily living expenses on your credit cards.

If there is any kind of pattern like this in your credit card

spending, it can build huge credit card debt pretty quickly. If

you are not making your credit card payments, the credit card

companies do inquiries to verify your address or other

information. Every time they make an inquiry on your credit

report, it makes you look like even more of a high risk, further

worsening your credit history. All the credit card debt on your

report, even if some of it is good, can make you look high risk

for car loans or mortgages – especially if any of those cards

hold high balances. Even worse, that bad credit report can keep

you from renting an apartment or getting a job that requires a

background check.

So keep in mind, as tempting as it may be to pay with a credit

card, choose the “debit” option next time. It's normal to risk

it all when times are tough, but doing so creates more problems

later that can take you years to fix. Credit card debt has long

term risks, but if you use credit cards wisely, you can build

credit that brings rewards instead.

About the author:

If you would like to get more credit information you can visit

our website which contains many credit resources.

http://www.my-credit-report.info This article is copyright

2005, but can be freely reprinted, as long as no changes are

made, including hyperlinks.

Written by: Dave Robinson