Smart Credit Card Choices

Sep 12, 2019 | 1 comment

Achieving financial security contributes to overall happiness. The good life is lauded by society and the media from glossy advertising to celebrities flaunting their lavish lifestyles. Young people and those with minimal financial experience often swipe their way to high credit card debt in order to keep up with trends and friends. Credit cards enable living beyond one’s means. Solicitation from various entities invite us to apply for new cards. Overspending by miscalculation of income versus expenses as well as spending without a budget leads to high debt. In addition, life-changing events force us to overuse credit cards.

Some years ago, I faced a life-changing event and was laid off from a great job. My credit cards became my crutch to pay many of my bills. My balances grew to an excessive amount, and the interest rate was making the balance even higher. Meanwhile, I was paying the suggested minimum payment, which was all I could afford. Financial experts suggest having a savings account to cover expenses for 6 months. I did not have sufficient savings to supplement the money lacking from my unemployment check to sustain my lifestyle.

My story is not unique but it’s a cautionary tale to save your dollars before spending them on what you want and focus on what you need. Remember the old adage: “Save for a rainy day.” Once I was employed, I was able to pay more than the minimum on my credit card, paying attention to my statement detailing the balance payoff timeline. I focused on paying off my smallest balance first. Some financial experts encourage first paying off higher interest rate cards saving money in the long run. You need to look at your own situation and seek the advice of a friend or expert in the field. Contact your credit card company and ask for a lower interest rate. They may agree, and you can save yourself quite a bit of money over time. Consumer credit counseling organizations can assist in creating a debt management plan.

The key is to get control of your spending by keeping track of what items you are purchasing and services you’re paying for in order to eliminate those you do not need. Having a budget and sticking to it will eliminate overspending. My motto these days is: “Don’t buy on time, pay the bill in full when it’s due.”

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Kathleen Ferguson
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