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| Message
for credit card users |
It’s the packaging that
makes credit cards so attractive and people cannot resist the fervor
to get one. At the same time, it is the credit card that puts consumers
in deep debt. Most Americans do the mistake of buying daily commodities
with credit card and activate the endless loop of debt by themselves.
Experts say that credit cards should be used for convenience when
emergencies arise. But people cannot control the desire to show
credit cards at the cash counters; somehow using plastic money has
become a status symbol.
The clash between cash transaction and credit transaction also plays
a vital role here. Cash transaction often gives an impression that
money is going out rapidly as consumers have to pay for the product
instantly. While credit transaction seems to increase personal savings,
as the total amount of money in your wallet remains unchanged. But
a thoughtful study reveals that credit dealing demands more money
in the form of interest, financial charges that one could save otherwise.
Top of that credit card companies use different methods to promote
their products and magnet more people. Obviously Low Introductory
Rate is one of those. Consumers think the low rate would continue
forever, but that does not happen. The truth is usually written
in the fine print and people hardly bother to read it.
Another critical topic that consumers often miss is the well-known
Default Clause that makes consumer helpless in front of the policies
of credit card companies. They change their terms and conditions
whenever they think, sometimes without any prior notice and consumers
are compelled to pursue it. Some consumers and experts have also
started raising their voice against credit card companies for scheduling
payment date on holidays. According to few it is nothing but a bad
tactic to push consumers in debts.
Debt consolidation could be a good option to avoid or remove delinquencies
on your credit card account. A smart borrower would like to consolidate
credit card debt
before it is tagged as charged off or handled over to a collection
agency. Like every system, debt consolidation also has some merits
and demerits. Low interest rate, single monthly payment for all
the accounts, no more collection calls are few of the merits of
debt consolidation. As per the demerit is concerned, some people
think that being under debt management program hurts credit score,
though most credit scoring models do not consider debt consolidation
or credit counseling program at all while assigning points to consumers.
However, as debt consolidation closes the active accounts, it can
have a temporary effect on your score. But once creditors are satisfied
with the payment plan and receive timely installment for three or
more consecutive months, chances are they won’t report the account
as delinquent any more and your score is likely to go high.
***Message by Debt Samaritan***
All the credit card users bumped into debt problem or predicting
the same in future: Take care of it before it’s too late. Manage
the debts tactfully; take
help of credit counseling services. And to all the new card
users: Keep the card for emergency, if you cannot control the desire
to use plastic when you are out to shopping; use debit cards and
avoid future debt problems.
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Biography: Debt Samaritans are the volunteer community
members who help consumers consolidate debt and offer unbiased information
on how to obtain good credit.
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