Credit cards are a great way to make purchases and record to
the penny your spending. They also provide a way to
postpone payment on items and thereby earn more interest on
For example, if you have a money market account that gives
you 5% annual interest and you spend $1000 a month through
your credit card, you can keep that $1000 in your money
market account for an additional month. At the end of a
year you would have earned an additional $51.16 for doing
Now $51 may not be much but it’s free!
Also you can use your credit card statements to keep track
of exactly how much you are spending and where your money
goes. With some credit cards you defensa deudores viña del mar can use personal finance
software to download your credit card transactions from the
Internet right to your home computer.
Credit cards may actually save you money. Some people avoid
making purchases if they do not have cash. Cash seems to
“burn a hole” in our pockets, it just disappears. It is so
easy to spend and it is right there. But a credit card
takes more effort and you know that you have to pay the bill
later that month.
Your credit card may also offer a rewards program where you
get cash back, frequent flyer miles or discounts on services
Credit cards are convenient. Some purchases, especially
those on the Internet, will only accept credit card payment.
Also you don’t have to continually go to the bank or ATM to
A credit card also provides a measure of safety. You don’t
have to carry large amounts of cash for large purchases.
Even if your card or credit card number is stolen, you are
not responsible for the thief’s use of your card.
But credit cards can also be a crutch. Too many people see
their credit limit not as the maximum amount of debt they
can go into, but as an account full of money that they can
Average household consumer credit balances have now topped
$7000. The monthly interest charge for a credit card
charging 18% interest is over $100. More than $1200 a year
just in interest.