Credit Cards: What are the Negatives to Having a Credit Card?

• Introduction to Credit Cards
• Credit Card Interest Rates Charges
• Credit Card Positive Benefits
• Credit Card Negative Results
• Credit Cards In Canada
• How to Select a Credit Card
• How to Select a Gold Credit Card
• How to Select a Platinum Credit Card

Credit Card Debt Can Quicky Become a Problem

Credit card interest rates are a major problem. Low introductory credit card rates are limited to a fixed term, usually between 6 and 12 months after which a higher rate is charged. As all credit cards assess fees and interest, some customers become so encumbered with their credit debt service that they are driven to bankruptcy. Credit cards will often stipulate a default rate of 20 to 30 percent in the event a payment is missed. That is, if a consumer misses a payment, the rate will automatically increase to a very burdensome level. This can lead to a snowball effect in which the consumer is drowned by unexpectedly high interest rates. Further most card holder agreements enable the issuer to arbitrarily raise the interest rate for any reason they see fit.

Credit Cards Can Ruin Your Credit Rating

If you don’t handle your credit card responsibly, you can cause serious harm to your credit history and rating. Problems paying your Credit Card Debt could disrupt the next time you apply for a car loan, apartment, or loan.

Credit Cards Make Spending Money Easy

It is easy to get carried away with credit cards and its spending habits because of the disconnect between the purchase amount and the re-payment amount. Credit card shopping can be addicting since it is not "your" money and it is not physically in your hand. Many people are sucked in by this thought process and thus, making it a lot easier to spend money you don't have.

Grim Facts About Paying Back Money Owed to your Credit Card

So you have gone out and started spending money on your credit card. You have had fun, you have purchase many things on impulse alone but now, you have to pay for it! The grim fact of the matter is, that in five years, you will still be paying on that $2000 dollar TV you just purchased and worse yet, it probably will cost you three times as much if you only make the minimum payments on the credit card!

Credit Card Interest Rates

Credit cards are a convenience product that many people do not realize or do not care that they are paying heavily for. Credit Card interest rates are typically just under 20% and only get worse as your credit rating slips. True, many cards have lower interest rates but even the best interest rate you can get on a credit card doesn't come close to comparing to an actual bank loan. Worse yet, that interest rate you signed up to get might not actually be there when you go to pay as Credit card companies do not have to honor fixed rates and can at any moment change your rate.