Credit Cards - The Good, the Bad and the Ugly

Credit cards have changed the way we think about money. It's all too easy to bring out the credit card without thinking of the consequences. Today money owed to credit card companies is increasing around the world and is a major problem for consumers.

Think of the days before these bits of plastic came into our lives. If you didn't have money you couldn't spend. Oh sure you could write a bouncing check but that wouldn't last for long before the bank would close the account or you would realize you had a problem. These days you can live in unconscious bliss for so much longer until you realize that the credit card is maxed out to the full and there really is a problem.

So is there anything good about credit cards? Well, yes. If handled properly you can actually save money, gain loyalty points, take advantage of special deals, purchase online and have money in case of emergencies. To make it work you need to pay the account in full every month, and on time. So that's the good.

Some of these same things can turn into a negative. Eager to gain loyalty points you spend everything on credit card and buy all the goodies on sale but all without thinking whether you have any money. Bill time comes and you find you don't have the money to pay your credit card in full so you make a payment as large as you can... but you still have some left for next month. This is the bad.

You have been spending up large, not taking any notice of what you have been spending. You unconsciously or consciously forget that last month you didn't pay the credit card balance in full, or even the month before, for that matter. Interest is adding to the balance and the remainder of the previous months purchases are still there. You have reached the credit card limit and now there's nowhere to go. This is ugly, and panic sets in.

How do you get out of this hell of debt you have created? Start to change the credit card habit by paying for purchases under $50 with cash, debit or check. Knowing that the money has to clear the bank sooner could help curb your spending habits. Make sure you regularly check your balance to guarantee that you have enough funds. And, always make more than the minimum payment. These are only a few small things you can do to start to get back on track and clear that credit card debt.