Bankruptcy & Foreclosures

Perhaps one of the most valuable tidbits of debt management advice I’ve encountered in my years as a mortgage broker is a simple reminder to the dangers of using credit cards unnecessarily. It is far too easy in our society to swipe a piece of plastic as a means of obtaining what we want. It’s quick, it’s easy, it’s painless, and it’s a loan. That’s right, whether we chose to think of it as one or not, the fact remains that every time we make a purchase with a credit card, we are taking out a loan. The next time you find yourself in a store with the desire to pull out the plastic, ask yourself the following: “Would I really take out a loan to buy this?” You will be surprised to how often the answer is no.

Here is a fact you may not have known. Last year credit card companies sent out a whopping 6 billion enticing offers to Americans in effort to lure them into signing up for more plastic. Credit card companies make their money by charging interest, plain and simple. They want to make it as easy as possible (not to mention as appealing as possible) for people to charge daily purchases, even if they have the cash folded a quarter of an inch away. Get into the habit of paying credit card balances off and keeping a card handy only for emergency uses. If the temptation to charge is too great, cut up the card or leave it at home. The easiest way to avoid drowning in a pool of credit card debt is to stay out of the water in the first place.