Eliminate Credit Card Debt

Eliminating Credit Card Debt When Filing for Bankruptcy in New Jersey

Generally, unsecured credit card debt is dischargeable – however, the U.S. Bankruptcy Code does delineate when this type of debt is not dischargeable,

January 25, 2012 /24-7PressRelease/ — New Jersey families continue to suffer through the greatest economic downturn since the Great Depression. Many unemployed workers still cannot find work and their debt only “snow-balls” – often to the point where it is impossible to get out from underneath it. For many of these struggling families, the only option they can turn to for assistance during these dire times is bankruptcy.

Often individuals consider bankruptcy as a response to mounting credit card debt. Generally, credit card debt is one of the largest unsecured debts held by most people filing for bankruptcy – which isn’t surprising, given that it has been estimated that Americans as a whole carry around $800 billion in credit card debt. For these debtors, bankruptcy is often the only hope for relief from being hounded and harassed by creditors on an almost daily basis.

Dischargeability of Credit Card Debt

Generally, unsecured credit card debt is dischargeable – or stated otherwise, creditors are enjoined from attempting to collect on the debt following the bankruptcy. However, the U.S. Bankruptcy Code does delineate when this type of debt is not dischargeable, and thus the debtor is still liable for the debt. Specifically, credit card debt is non-dischargeable when the credit card debt is incurred by fraud.

In the context of credit card debt, fraud can manifest itself in a variety of circumstances. A couple of the more notable instances of fraud that can render credit card debt non-dischargeable include:
- Lying on your credit card application
- Fraudulent use of the card

Fraudulent Use of Credit Cards

If you lied on your application when originally obtaining a credit card, it is possible that the court will not discharge the debt during bankruptcy. For example, if you falsely represented your income, assets or job in an attempt to appear more qualified for credit. However, this is not a very common route that credit card companies take.

A more common route for creditors to take when attempting to render credit card debt non-dischargeable is to show fraudulent use of the card. The Bankruptcy Code does enumerate certain situations in which fraudulent use is presumed.

For example, if a debtor charges more than $600 on a card for luxury goods – goods or services not reasonably necessary for support of the debtor – within 90 days of filing for bankruptcy, the court may deem the debt non-dischargeable. The situation is the same if a debtor gets cash advances of more than $875 on their credit card within 70 days of filing for bankruptcy.

However, not all indicators of fraud are statutorily defined. A bankruptcy court may still find evidence of fraud, and subsequently render the debt non-dischargeable, when other indicators are present. Some of the factors courts make look to include, but are not limited to:
- the amount of time between the credit card charges and the filing of the bankruptcy
- whether or not an attorney was consulted regarding filing for bankruptcy before the charges were made
- the number of charges made
- the amount of the charges
- the financial well-being of the debtor when the charges were made
- whether the charges were above the credit limit
- whether several charges were made on the same day
- whether or not the debtor made any payments on the card after large charges
- whether or not the debtor had a job
- if unemployed, whether the debtor had job prospects
- whether there was a sudden change in the debtor’s buying habits
- whether the charges/purchases were necessities

Contact an Attorney

If you believe bankruptcy is the answer for you, it may be best to simply avoid using your credit card, if at all possible, in order to evade any allegations of fraudulent use.

Every situation is different, and in some instances bankruptcy may not even be the best option. For example, a qualified attorney can also help a debtor negotiate with credit card companies in an effort to consolidate balances, reduce high interest rates, eliminate late fees or even settle debts for a smaller percentage of what is owed.

If you find yourself facing insurmountable credit card debt, contact an experienced New Jersey bankruptcy attorney to be advised of what is the best way for you to manage or eliminate credit card debt.

Article provided by Goldman & Beslow, LLC
Visit us at www.nj-bankruptcylaw.com/

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“Low Interest Rates = Bigger Savings”

When choosing a credit card, the interest rate should be the first thing to consider. Low interest rates only mean one thing: more savings! The bigger the balance of the account, the bigger sum of money will be saved. As more money gets saved, more money gets stored and more interests will roll in the bank account.

Other credit cards companies have reasonable interest rates and offers more like giving the percentage of money back. The more money spent on credit, more money will be returned to the card’s user. Most credit cards use 5% on special purchases and 1% on regular purchases.

Some banks give “Reward Points.” These “Reward Points” accumulate as the credit card is used and it may be exchanged for certain items catalogued by the bank. Points may be exchanged for microwaves, cell phones, televisions and the like. This is yet another great feature to be considered when looking for a card.

A number of major banks offer low interest rates. A few major banks would be: Citibank, American express and JP Morgan Chase. These banks are known to give 0% introductory APR (Annual Percentage Rate) for 12 months. Most of these cards offer no annual rates.

Here are some credit cards with low interest rates:

Citi Dividend Platinum Select Card (Citibank):
-it features 0% APR (Annual Percentage Rate) for 12 months
-it rewards the user. The more this card is used, the bigger the rewards.
-earn 5% return from expenses in supermarkets, drug stores and gas stations.
-earn 1% return from other expenses.

Citi Premier Pass Card (Citibank):
-0% introductory APR.
-get points by flying. Every mile gets you a point.

American Express Blue Card (American Express):
-3.99% fixed interest rate.
-0% introductory APR for 15 months.

Chase Cash Plus Visa (JP Morgan Chase):
-0% interest rate for 12 months.
-has other cash back promos.

Chase Flexible Rewards Platinum Visa Card (JP Morgan Chase):
-0% introductory APR for 12 months.
-a dollar spent equals a point.
-no annual fee.

Pulaski Bank Visa Master Card:
-0% on balance transfers for 5 months
-6.99% fixed rate
-$35 annual fee

Discover Card:
-0% APR for the first 10 months.
-$0 annual fee.
-9.99% fixed interest rate.

These cards have the lowest interest rates in the credit card market today. These cards do not only offer low rates, but they also give certain rewards for the frequent users of the card.

There is no way to miraculously becoming debt free. Excessive debts incur over time. Hence, patience and effort is needed in order to reduce, and ultimately eliminate credit card debts. The average household has a credit card debt around $8,000. Unfortunately, there are individuals carrying much higher balances. Due to high finance fees, credit card companies make it impossible to payoff the debt. However, alleviating debt is doable. Here are a few tips to help you become debt free sooner.

Use Cash for All Purchases

Several people will make claims of wanting to become debt free. However, these same individuals continue to use their credit cards for frivolous purchases. Today, we have our wants and needs confused. In order to fulfill a want, people regularly go on shopping sprees, vacations, and eat out using their credit cards.

The first step to eliminating credit card debt is to stop using the cards. Do not cancel credit accounts. Instead, cut the cards in half or store them in a place where they are not easily accessible. Breaking the habit of regularly using a credit card is difficult. However, once cash is being used for all purchases, you will notice a balance reduction.

Get a Personal Debt Consolidation Loan

Debt consolidation loans have their pros and cons. For starters, these loans are great because they allow debt consolidation at a low interest rate with fixed terms. Instead of paying a credit card with an interest rate of 20 percent, you can obtain a personal loan with a rate of 8 or 9 percent. This option affords the opportunity to become debt free in five years, as opposed to twenty or thirty years.

Unfortunately, there is a downside to debt consolidation loans. Some people with terrible spending habits may accumulate more debts once their credit cards are paid off. The purpose of debt consolidation loans is not to create space for new debts. When this occurs, many people become financially strapped because they have doubled their debts.

Transfer Balance to a Zero Percent Credit Card

One method for quickly paying off credit card debt involves transferring the balance from a high interest credit card to a zero percent interest card. With a high interest rate card, the minimum payments barely cover the finance charges. Thus, the balance never decreases. Zero percent interest cards offer an interest-free period. Therefore, all payments will to toward reducing the principle balance.

Author: Carrie Reeder

If you are behind you will most likely want the services of a experienced debt settlement expert. Often they may be able to negotiate a lower interest rate if your situation warrants it. Debt assistance is helps for anyone who has debt problems. Take action but don’t rush is a good rule when you are already in a mess do not to make it worse by a bad decision on who is going to assistance you.

Here are some of the choices available to you:

You could try for a Loan:

In some circumstance people with debt problems can arrange for either loans or refinancing of their debt load. However, be aware not all of these arrangements are good ones. For instance most often it is not a good idea to convert unsecured debt into secured debt – no matter what the lender tells you! If you do this you have just increased the chances of you losing your property (yes your home if that is what you used as security for the new loan) because if you default on it they can now grab it. Not a good move – except for the lender. When you are in a desperate situation do not make it worse by making stupid moves.

Debt Settlement / Negotiation works well for most people:

Debt settlement companies can act on your behalf to negotiate a reduction in your debt by up to 60% by talking with your creditors. These companies are more likely to get you a good settlement as against. A bit like trying to be your own brain surgeon acting on your own behalf is not a smart move. The fresh bankruptcy laws were introduced in fall 2005 and lots more people have turned to debt settlement as a excellent solution since then.

If you have a lump sum available (for instance a loan from a parent or relative) you can often get an even better payout on your loan – but leave it to the professional to negotiate for you, they know the ropes you don’t. There have been instance where the consumer paid off their debt in a lump sum as agreed and the creditor still came after them for the full debt amount. This will not happen if you have the right type of help on your team.

Professional debt settlement companies will charge a good fee for their services but most of it will be based on their performance – the more they charge you the more they should save you. These types of services allow you to move on with your life, stop the creditor harassment and be debt free relatively quickly. Once you achieve it don’t fall back into the same trap again.

You could try Debt Counseling:

Debt counseling is a popular debt service but only works well for a relatively small number of people. Your creditors would much prefer you to seek credit counseling before you decide to declare bankruptcy. Think about it – I wonder why they prefer it? I guess maybe its because you end up still paying them the full amount and some interest. These services are usually nonprofit. They are also often in part funded by the credit companies.

Don’t pay them until you check them out. Like other types of business there are plenty of scam companies and individuals ready to take your money off you and then not perform any needed function for you. Check for online scams on these types of companies and be sure to check out the people you are planning to work with very well before using their services or passing over any funds. If there is too much pressure to sign up run away. On the other hand consider this with the knowledge that you do need to take action to resolve your problems.

Most involve budgeting. Write down all your sources of income, expenses, and debt. Then create a budget tight enough so you have money left over to pay down your debts. If your credit cards lead to impulse purchases, cut them up!

But it’s easier said than done.

Dave Ramsey, host of a daily money-makeover radio show, says that many people who call in want an easy, instant solution. His first advice is to drop that notion and get ready to make sacrifices.

“We live in a microwave culture, and the answer to this issue is not microwave, it’s crockpot,” he says.

The best start might be to find a source of inspiration. Focus on an unselfish goal that you can reach after conquering your debt – perhaps paying for a child’s college tuition. Or find friends or a group such as Debtors Anonymous to support you through the process.

The snowball method

Once motivated, Ramsey recommends the “debt snowball” approach: List all your debts, excluding a home mortgage. Then take drastic measures, including selling big-ticket items you don’t really need, to pay off the smallest debt as quickly as possible. Meanwhile, pay just the minimum on other debts, he says. After the first one is paid off, you have more resources to tackle the second, the third, and so on. Your results will quickly snowball, he says, and that will enable you to keep at it.

Another solution: Negotiate with credit-card companies to see if they will match offers for lower rates. Fifty consumers did that for a study by the US Public Interest Research Group in 2002, and just over half of the companies cut their rates by an average of more than 30 percent.

Using home-equity lines of credit to pay off credit-card balances can also be a good move, but Ms. Little cautions against doing that until you are sure you won’t accrue more credit-card debt.

“People who get themselves into an exorbitant amount of debt need to change the way they think about debt before they tap into any other sources,” she says.

If your debts are severe, you may want the help of a credit- counseling service. But do your homework before choosing one. Reputable nonprofit agencies offer financial education and budget counseling. If your situation warrants it, they will propose a debt- management plan in which they negotiate with your creditors to reduce or eliminate interest charges. You make one payment a month, which the agency distributes to your creditors. Be sure to keep track that the agency sends the payments promptly.

The credit-counseling industry has ballooned in recent years, and it’s under scrutiny by the Internal Revenue Service and lawmakers because some agencies abuse their nonprofit status. For instance, they might pressure people into debt- management plans and offer no other options because much of their income comes from creditors paying them a small percentage of the dollars they recoup.

In 2002, the Better Business Bureau (BBB) received 1,480 complaints about credit-counseling services, up from 261 in 1998, according to a report by the National Consumer Law Center (NCLC) and the Consumer Federation of America.

Caution with a counselor

Some credit-counseling trade associations require members to maintain standards for training their staff and disclosing information to consumers. But Deanne Loonin of the NCLC says the enforcement is not always sufficient.

“We suggest that you approach all agencies with the same questions and the same caution,” she says.

In addition to checking with the local BBB, contact your state attorney general’s office to see if any agencies are the subject of legal action.

Be sure to ask the agency for written quotes of its fees. Experts say it’s reasonable for debt-management enrollment to cost up to $50, plus a monthly fee of perhaps $15. But some agencies try to charge a month or more of your debt payment up front as a fee.

Before you enroll, experts recommend finding out how doing so might affect your future ability to get credit. The main credit- scoring company, FICO, says that participation will not negatively affect someone’s credit scores. But depending on your situation, individual creditors might view it as a negative factor.

Whatever practical steps you take, staying motivated is the real key, Ramsey says.

 

They assumed that would let them eliminate their debt while avoiding further damage to their credit report. But one consumer advocate says turning to such counseling services can actually destroy a person’s credit rating just like a bankruptcy does.

Blair Drazic, a former assistant public defender for the city of St. Louis and author of the book “Forgive Us Our Debts,” offers a warning to those in financial distress: Avoid consumer credit counseling.What most credit experts don’t tell you, Drazic said, is that the use of a consumer credit counselor or debt management program is reported as a black mark on your credit report. And that black mark could stay in place for seven years — nearly the same length of time as a bankruptcy filing — even after late payments and debts are brought current.

The “credit devils” — a term Drazic uses for the credit industry – - run a system of “extortion and blackmail, where they can legally take the food from your children’s mouths . . . through late fees and usurious interest rates,” he said.

Drazic said high interest rates and exorbitant late fees are compounded when working people seek out the services of credit counselors in order to pay back their debts, only to find in the end that their credit rating has been dashed.

So instead of turning to credit counselors, who typically act as a go-between for consumers and creditors, Drazic said it is better to go it alone, working directly with creditors.

David Jones, president of the Virginia-based Association of Independent Consumer Credit Counseling Agencies, said working directly with creditors is one option consumers can take, but he denies that using a credit counselor will mar a credit report.

“That’s not going to be listed on your credit report for seven years,” Jones said. “There will be a notation on the credit report that you engaged in a debt management program through credit counseling. That’s typically seen by most creditors as a positive thing, not a negative thing. That comes off when you graduate from the program and pay your debts off.”

Yet Evan Hendricks, author of “Credit Scores and Credit Reports,” said that while the use of a credit counselor does not automatically lower a credit score, which assesses a consumer’s credit risk level, potential lenders who review a credit report may turn down a loan request upon learning that a consumer used the services of a credit counselor.

“There’s no question that some lenders would look at it in a very negative way,” Hendricks said. “The mortgage area is the one where they’re most likely to look at the entire credit report, not just rely on the score.”

And Hendricks agrees that skipping a credit counselor is the better choice when financial hard times are encountered.

Heather Greer, a spokeswoman for Experian, one of the three main credit reporting bureaus, said in an e-mail response to Deseret Morning News questions that accounts paid off through a credit counselor are listed as “settled” on a credit report.

“A special comment indicating the payments are being managed by a credit counseling agency will appear with the account on the credit report,” Greer said. “A ‘paid, settled’ status would remain with the account until the account is deleted, accurately reflecting the final status of the account with the lender.”

That “paid, settled” status, Drazic said, won’t be deleted off a credit report for seven years.

Janet Bodnar, a columnist for Kiplinger’s Personal Finance, said in a recent column that while a debt management program can erase debt, “it doesn’t necessarily get rid of black marks on your credit report. Those stay on your record for seven years.”

In recent years, the debt management industry has come under fire for promising to improve credit reports while charging high fees.

Twenty-eight credit counseling or debt management companies are registered in Utah, according to Francine Giani, director of the Utah Division of Consumer Protection.

One Utah company, the Consumer Credit Counseling Service of Utah, earlier this year was accused by the state of mishandling client funds, causing client payments to creditors to bounce.

The Brimmers were among the victims. The couple made $376 monthly payments to CCCS to pay down $17,000 in credit-card debt.

 

HOUSTON — Good credit is a tremendous asset and when maintained properly, it can provide you with financial freedom and save you money. Unfortunately, maintaining good credit can sometimes be difficult, especially when unexpected situations cause you to incur debt. In fact, according to bankrate.com unexpected medical expenses, a reduction in income and divorce are three of the top ten causes of debt problems.

If your credit score is less than desirable, there are many things you can do to repair your credit and improve your financial standing. The following tips from the experts at Money Management International can help you regain control and start down the road towards repairing your credit.

Develop an Action Plan: Sit down and develop a budget that is feasible and eliminate unnecessary expenses. Also, be sure to contact your creditors to ask about payment options, so you can begin bringing your accounts current. This will show them that you are serious about improving your credit.

Be Patient: While most credit scores do not change more than a few points from month to month, time can still be the best cure for less-than-perfect credit. Generally, it takes about one year of on time, full payments to re-establish your credit.

Review your credit file. Request a free copy of your credit report, at www.annualcreditreport.com. Be sure to verify that your accounts are being reported accurately. According to creditreports.com, 70 percent of credit files contain errors.

Open a secured credit card account. A secured credit card is a good way to raise your credit score, especially if you don’t qualify for a regular credit card. Use it, make timely payments, and eventually the account will no longer need to be secured by your savings. Be sure to shop around before opening a secured credit card account as the fees and interest rates can vary dramatically.

Get help. Ask someone responsible and with good credit to put you on his or her account as an authorized user. They can then request that the creditor report the account activity on your report.

Contact an expert. Consider contacting Consumer Credit Counseling Services and ask about a Debt Management Plan (DMP). A DMP can help you establish a budget, assist with creditors and eventually become debt free.

“Finally, remember that credit is not a right; it is a privilege that you should protect,” said Cate Williams, vice president of financial literacy for Money Management International. “The good news is bad credit will not haunt you forever. The Fair Credit Reporting Act (FCRA) states derogatory information can only remain on your credit bureau file for seven years.” Visit www.ftc.gov for more information.

About Money Management International

Money Management International (MMI) is a nonprofit, full-service credit-counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24/7 by telephone and Internet. Services are available in English or Spanish. To learn more, call 800-762-2271 or visit www.moneymanagement.org.

Setting up an offshore merchant account not only involves paperwork but also certain fees as well. It would be ideal if there is such a set up that is virtually free, which some merchant account providers do offer. But for offshore merchant accounts, there will always be fees involved.

There are a great deal of hesitation on merchants’ minds to set up offshore, one of the reasons behind the doubts is the notion that there are ”hidden” fees in the contracts for offshore merchant accounts. What happens in this scenario is that you’ll be introduced to a list of rates that you’ll sign up for because you have found them to be reasonable. But once the bill comes in, you’ll see a number of additional fees in small amounts but when added all together have actually eaten a considerable percentage of the amount you need to pay for the month. This can be really frustrating, isn’t it?

So, to assist you in this setback, provided are standard fees that merchant account providers standardly offer in setting up an offshore merchant account:

Application Fee
Setup Fee

Programming Fee
Annual Fee

Monthly Maintenance Fee
Overlimit Fee

Gateway Setup
Transaction Fee

Retail Swipe Software fees
Check-by-phone/fax PC software fee

Web Shopping Cart fee
Discount Rate fee

Address Verification (AVS) Fee
Statement Fee

How you are charged

Application fees are rarely charged nowadays. This is so because of the growing competition among merchant account providers. Zero application fees are the one of the marketing strategies to attract clients. But, just to give you a head start, industry rate for application fees ranges from $75 – $125.

Setup fees are also a thing of the past. Most providers don’t charge this anymore also as a part of the package to keep clients coming in. Industry rate is from $50 – $150.

Programming fees are applied when you want to install a software or terminal. Most providers don’t charge this anymore as programming fees are considered to be part of the set up process. Industry rate is $50 – $95.

Annual fees serves as a membership fee in certain ways. By the book, purpose is for the maintenance of the account. But it’s now also being taken out of the charges as part of attracting potential clients and keep the current ones in the circle. Industry rate is from maximum of $125.

Monthly maintenance fees can be regarded as the other option for annual fee. This is a choice of the merchant account holder if they want to pay the whole dues every year or divide the amount by 12. but in this day and age, monthly maintenance fees are also being taken out to promote client loyalty. Industry rate is up to $10.

Overlimit fees are charged when the account exceeds its limit. The industry rate varies because the overlimit amounts are grouped with the corresponding penalties. But this fee is also not charged anymore as part of efforts to boost client patronage.

Payment gateway setup fee if for the the installation of the payment gateway that is critical to your offshore merchant account. Payment gateway receives the credit card information of the your customers. This is also being taken out of the bill as it is regarded as part of the setup process. Industry rate is $99 – $299

Transaction fees are the fees charged by the processor for every credit card transaction. This is charged even if the transaction was approved or declined. 20 – 30 cents is the charged for every transaction made either by swiping, keying, over the internet or mail-order-telephone-order (MOTO).

Retail swipe software is a credt card processing software solution. This serves as an wireless terminal if you have a PC or a laptop with an internet connection. You can print out receipt real-time from top-of-the-line retail swipe softwares available in the market. For better client patronage, most merchant account providers are also charging zero for this service. Industry rate is $175 – $395.

Check-by-phone/fax PC software fee are charged when payments using a check are made over the phone, or send by fax or electronic check payments. This is still done, but rarely. For better efficiency and security, online credit card transactions are preferred. Plus, currently, there is no charge for this service as well. Just so you know, industry rate is $149 per month.

A web shopping cart fee is for the use and maintenance of your online shopping cart. Of course, when you have an offshore merchant account, you can also enjoy the luxury of selling your products and services online, and with a shopping cart, you have global market. But this fee is also being charged free as well, for better client loyalty.

The discount rate fee is the percentage charged for each transaction that the processing company (merchant account provider) charges to manage the transactions for you, either swiped, over the internet and MOTO.

The Address Verification System is a technology that double-checks the validity of the address that your customers enter for product shipping. What this system does is verify and compare the address keyed in with the address registered in the customer’s credit card issuer. Industry rate is from $5 to $10.

The statement fee is the charge for the production and mailing of your monthly statements. Your monthly bills as an offshore merchant account holder includes all the deposits in the account, total of volume sales, and other charges for the month. Now, this fee is also free of charge for improving customer service. But industry rate is $10- $15 per monthly statement.

What to look forward to

Credit Card Rest In Peace announces the start of a blog to communicate with Americans interested in eliminating credit card debt.

(PRWEB) May 11, 2006 — Credit Card Rest In Peace announces the start of a blog to communicate with Americans interested in eliminating credit card debt.

The primary reason for the Credit Card Rest In Peace Bog is to address the overwhelming concern of Americans demanding answers to the volatile changing landscape of the Credit Card Industry. This Blog will be insightful as it addresses the need and demand of Americans in financial distress for answers.

Visitors are invited to share their stories and thoughts. Americans will benefit from the exchange of information with each other and from the sources posted on the site.

The Credit Card RIP Blog can be opinionated and informative. A fresh pair of eyes will benefit visitors to the blog as well, so feel free to share your opinions and to be part of this experience.

‘Save for a rainy day’ is the most common advice we hear. No one knows the future and a discerning person allocates a certain amount of his income towards savings. There are many ways to do this. Opening a separate savings account, investing in stocks, paying towards insurance and annuities are some of the common methods that people use to save their money.

There are however quite many people who prefer to use credit cards regularly and for almost all transactions, whether necessities or luxuries. They do this in the mistaken belief that not paying for the same in cash is a form of saving.

One of the most common psychological barriers that a consumer has when it comes to his purchasing power is the use of money. It is human tendency to consider a product to be costly when payment is made in cash. It has to do with the physical handing over of the notes in relation to obtaining the product.

When we pay cash, we tend to evaluate the value of the product more seriously.
On the other hand, paying by the credit card also has a psychological connotation. We tend to see only the affordability and not so much the actual value of the product. The ease, with which we can afford almost anything by using a credit card, drastically reduces our ability to make a rational evaluation. We also break down the total cost into monthly instalments and rationalize the purchase. This has a flip side however.

Credit cards provide the consumer with the flexibility to afford a better lifestyle, which may be even beyond his income. The breaking down of the payment into small monthly instalments also gives the purchaser a false sense of affordability. What is not calculated however is the rate of interest involved and the fine print in case of a default in payment.

A large amount of people use credit cards to purchase everyday groceries, pay for medical bills, education fees, expensive holidays, utility bills and more.

The idea of ‘cashless payment’ is so appealing that credit cards have become a way of life rather than a facility for emergencies.
While paying by card does not eliminate the truth that at some stage the cash has to be handed over, it is the facility of deferred payment that is the big draw.

There are many important factors that a credit card user has to understand before he even gets one.

The requirement of all credit card companies is payment of the minimum balance. Usually, this is what most people think they should pay and nothing more. This only carries forward the credit and consequently adds to it the interest as well.
This means that the consumer may end up paying a large amount of interest over a number of years. There is also the possibility of the interest becoming more than the actual cost of the product. So in effect for the so-called ‘cashless payment’ you are paying more cash than you should.

Further there is nothing to stop the credit card companies from hiking the APR (annual percentage rate) at any point of time especially if you default on payment.

Added to that, the late payment fees and other hidden charged will only increase your liabilities.