Lies, Lies, Lies - How They Trick You Into Amassing Credit Card Debt

Credit Card Debt Lie #1

You Can't Live Without Credit Cards

The reality is if you are depending on credit cards to fill the gap in your pay or take care of emergencies, you are waltzing right into the credit card debt trap. You may feel that you can't live without credit cards but the truth is, you can. It may take a major shift in your spending and saving habits, but you can do it. Most people don't know that credit card debt is the number one factor that leads to debt trouble. That is until their plastic money runs out and their massive debt load starts to resemble Mount Everest.

Credit Card Debt Lie #2

You Need Credit Cards For Emergencies

One of the greatest debt accumulation lies ever told is the one about credit cards being great for emergencies. Time and time again, credit card holders convince themselves to apply for a credit car for emergency purposes only. But what they don't do is properly define what an emergency is. Is it a one in a lifetime sale on a Flat Panel TV? Is it a buy a sofa, and get the loveseat for free deal? As it happens, the majority of individuals start using their plastic money for the basic necessities of life: grocery shopping, paying bills, gasoline, ordering products online, entertainment, etc. You know the rest of the story; eventually they amass thousands of dollars in credit card debt they cannot afford. Now they are having a true emergency, how do they pay those bills before the debt collectors start calling?

Credit Card Debt Lie #3

No Money Right Now? No Problem! Just Charge It!

When the "get it today, pay tomorrow," ads first appeared on the scene, the average consumer didn't see this economic Tsunami rapidly heading their way. The ads touted some pretty tempting benefits. You could extend your buying power by 30 days or more, get 0% interest and receive credit card rebates with every purchase. The best one of all is the one were there's no payment for 12 to 24 months! Like lambs to the slaughter, people bought rooms full of furniture on credit and charged thousands of dollars in purchases to zero percent credit cards. The thinking was, when tomorrow came, they'd be in much better financial shape. By the time tomorrow came, their credit card debt was totally unmanageable. There was simply not enough income to pay all of the minimum monthly payments and take care of their households. That's when they realized what a massive mistake they made in believing that lie.

Credit Card Debt Lie #4

You Need Credit Cards To Have a Good Credit Score

Smart consumers realize that the credit and finance industries worked together to create what we now know as the credit scoring system. What they may not know is this is a perfect example of social engineering. Unbeknownst to the average consumer, this system was engineered to steer consumers into accumulating debt. Have you ever read some of the credit score printouts? Did you notice how they suggest certain actions to improve your credit score? Actions such as:

1. Request a credit line increase

2. Never close unused credit cards

3. Never leave any credit card unused for a long period of time, and

4. To increase your credit score, open one or two more accounts.

Each of these actions requires a person to take on more debt, (whether short term or long term) in order to increase/improve their credit score. The only ones who win when consumers increase their debt load are the credit card companies and those involved in the debt industry.

Credit Card Debt Lie #5

We Have Great Payment Plans

It shouldn't take a mathematical PhD to figure out that there is no such thing as a great payment plan. In the final analysis, credit card debt is extremely costly. For example, let's say that you ring up a balance of $5000.00 at 14% APR. If you were only making the minimum payment of 2%, it would take you approximately 22 years and $5,887.00 in interest payments to pay off this debt.

That means you would have paid more than double for the items you bought. The credit card companies love it! You literally work for them, for the next 22 years of your life. When it comes to credit cards, don't believe the lie, there is no such thing as a great payment plan.

Credit Card Debt Lie #6

Every Time You Use Our Credit Card You'll Earn Points!

This is another slick tactic credit card companies use to bait people into accumulating credit card debt. It starts off innocent enough. To get points, a person starts charging little bitty things such as breakfast and lunch at fast food restaurants, gasoline, trips the store and other little nick-knacks.

These are things they should be paying with cash. The next thing they know, those $4.00, $6.00, $10.00 and $20.00 charges have added up into the thousands. It happens so fast most people never realize what's happening. Yes, they got the points, but they also accumulated more debt in the process.

If you have fallen for any of these credit card debt accumulation lies and realize what a monumental mistake you've made, congratulations! You are now on your way to breaking free from the all-consuming debt trap.