The Credit Card Trap

One of the traps of a high credit card spending limit is not knowing when to stop with the purchasing. I know of several people who have racked up a huge debt with their credit cards. What you should remember is that things you charge to your credit card are loans on money you do not have yet. You loan, you have to pay sometime.

Unfortunately, some people don't really think of it that way. They use their credit cards to extend their buying power, maxing their cards and falling into the trap of huge loans and huge interests, which compound over time.

They also do not know that having a bad credit card record would affect their future loans if they are later going to buy a house, a car, finance a business etc. People with bad credit records would have a hard time having these loan applications approved.

What do they need to do in order to improve credit score? First of all, they do have to admit that they have a spending problem. Stop using credit cards, better yet cut them up, so that they won't be able to spend further and add to the burgeoning debt. Try to talk with the credit card company for a compromise agreement so that they may be able to gradually pay off their debts. Hopefully, this would help a bit to improve credit standing.

In cases where there may be credit dispute, enlist the help of companies or individuals who may be able to help.

Even if not paying credit card debt is not going to get you in jail, at least here in the Philippines, as far as I know, the banks could send a sheriff to seize your properties to pay it off. And, of course, your bad credit record would remain for a few years, preventing you from getting loans and such.

0 comments: