Are Credit Cards Being Hazardous to Your Financial Health

How many credit cards do you have? Maybe even more important is how many of them carry a balance each month. If you are getting into debt and using credit cards to bail yourself out then as they say "Houston we have a problem." You have to ask yourself if you should be paying cash instead of charging everything.

It is a sad reality today that the financial health of the average person in America is worse today than it was 10 years ago. Foreclosures are at an all time high. Savings are at an all time low and consumer credit card debt continues to rise.

Many people use credit cards to pay for almost everything. When is the last time you saw someone write a check. It just does not happen very often. Using a credit card is very easy to do.

As long as you are the type of person who keeps track of their monthly expenditures this is o.k. The other thing is as long as your job keeps providing you with a good monthly income paying your monthly credit card charges is not a problem either.

What happens next however is where credit cards become hazardous to your financial health.

Using credit cards provide you with the means to live a better lifestyle which may be even beyond your income. The breaking down of the payment into small monthly instalments also gives you a false sense of a security.

The more you use credit cards the easier it is to pay for medical bills, groceries, the holidays, education fees, day to day living expenses, and more. Sooner or later this catches up with many people.

Credit card companies only require you to pay the minimum balance every month. Some months that may only be what you can afford to pay. This carries forward your credit card balance and begins to add to it the interest as well.

This means that you begin to pay a large amount of interest which can add up over several years. There is also the possibility that the interest will end up costing you more than the actual cost of product was to begin with.

One major problem is the high APR, annual percentage rate, that many credit card companies charge. As your balance increases it becomes almost impossible to pay anything towards it and you are only paying the interest every month.

This is a cycle that you can not easily get out of. One way to do that is to look towards a credit counseling service for help. FreedomDebt.com is one company that is actually better than a credit counseling service.

They will look at your financial picture to see how they can help you. They will work with your creditors to set up a repayment plan and get interest stopped or lowered. Then you can begin to get your life back and recover financially from the hole you are in.

To think all of this started because of the misguided use of credit cards and in many cases it could have been avoided by paying cash instead.