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The Working Of A Credit Card |
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Submitted by Leann English
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Ever wondered how this amazing piece of plastic gives you the power to purchase products from various stores – right from a shoe to your grocery to a refrigerator? In today’s time and age it is rare to find a U S citizen without a credit card. Surveys reveal that most own at least one card and many have two and even three credit cards. Then of course there are those who have credit card folders with nearly 5 – 10 credit cards from various organizations.
A credit card is today an important source of identification proof apart from being really handy when you don’t want to carry wads of cash with you on your person. Even if you want to rent a car, you need to have a credit card as proof. A credit card really gives you the freedom to make a purchase and then pay back for it only a month back. However, consumers have got to beware of this ‘easy’ pay back system. Once you get caught in the whirlpool of having notched up your credit balances in your various cards, it is very difficult to get out of it.
If you are capable of paying back the entire amount within a month then it is great, however, most consumers tend to avail of the rolling facility, where you have to only pay back a minimum amount every amount and continue to make purchases on your card every month. This mounts to a huge sum and as they say it snowballs to a mammoth sum to a point when you cannot pay back and then issues brew with the legal system and you are in big trouble then.
You know the finance charge on certain cards can go up to a frightful 23 per cent and that means you are paying way above the actual sum you actually made your purchases. Statistics reveal that in 1999, in America, the consumers were charged nearly $ 1.2 trillion on their credit cards. Whew! Quite a stomach churning sum that. So, if you do own a credit card, do ensure that you don’t get into the whirlpool of getting together huge sums of credit. Paying back becomes next to impossible, throws you to the far end and you become a nervous wreck as you struggle to pay back.
When you have a credit card, ensure that you use it wisely and make good use of it. Yes, this piece of plastic is indeed a fantastic invention provided you use it prudently and wisely. It can be very handy and gives you a better purchasing power and the confidence to walk into a store and make the necessary purchase. So go ahead and enjoy the many uses of a credit card – but use it wisely.
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