Credit cards always seem like a
good idea at first. Even if you've been burned in
the past, when money gets tight, the shiny plastic
rectangles seem like the perfect quick fix for any
situation. Whether it's over-the-top finance charges,
unheard of rates, or identity theft, there are a
number of ways for that quick fix to turn into a
long nightmare.
I, for example, decided very quickly
into my college career, that I was not going to
get caught in a credit card three ring circus. It
was trouble, and the kind I didn't want to get into.
However, when my friend invited me to visit her
in Europe over my winter break, I didn't see any
other solution besides giving into to one of the
several credit card offers I had received upon reaching
my eighteenth birthday. Armed with a six hundred
dollar credit limit about two hundred dollars in
Christmas money, and a round trip ticket to Amsterdam,
I set off for two weeks of fun-filled adventure.
In retrospect, eleven hundred dollars total is a
great price for an all-inclusive two weeks stay
including Amsterdam, Paris, Brussels and Dublin.
That is, until eleven hundred turns into seventeen
hundred, and you realize one sleepy morning that
you're not even paying for the trip at all, you're
barely paying finance charges on your over-limit
balance.
This is just one of a few ways that
credit cards can go awry. Recently a lot of cards
have put sophisticated refund systems in place in
order to protect victims of identity theft. A lot
of smaller credit unions still have no real way
of protecting their customers against this type
of fraud. With internet shopping as popular as it
has become, it is very easy to lose track of the
many places that your personal banking information
is floating around in. Also, with a lot of people
using debit cards to get the same conveniences that
credit cards provide without accruing
the same drastic debts, it is easy for that identity
theft to result in the stealing of actual funds,
as opposed to credit. Money from your checking account
can sometimes be much more complicated to replace,
though there is the bonus of being able to go to
a bank branch and speak with a real person, whereas
most often, credit card companies are little more
than voices and names in the cloudy netherworld
of cellular phone waves.
This isn't to say that credit
cards inevitably lead to certain doom. However,
before you decide that the flimsy plastic is the
way to your dreams, make sure that you really understand
all of the policies of the company you choose and
that the credit card payments are a realistic
part of your monthly budget. Small limit cards
can be a good way to build credit for your future,
as long as you make sure you make the payment minimums
on time, and don't spend more than you can afford.
If you don't follow those simple guidelines, you’re
on the right track to the wrong way.
