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Credit Cards
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by: Dave Saltonstall
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Word Count: 406
Many people in the world today are able to pay bills and purchase material goods and services with their disposable income. However, there is also a significant amount of people who might not have the means to purchase these items or pay their bills.
Fortunately, or unfortunately as we will discuss in a minute, there are a wide variety of credit cards available for them to remedy this situation. The “fortunately” part of this argument is for those families who can use credit cards as a means to acquire things or pay off other debt, but have the income coming in that will allow them to pay cards off, known as debt-consolidation.
In addition, people who have the means to pay off credit card debt also take advantage of 0% credit card deals to purchase some goods, which essentially gives them a free loan for a term (i.e. 12 months) and makes it easier to pay off. The “unfortunately” part of the argument is that credit card debt can add up quickly and if you do not have the means to make significant payments on it, the interest will compound on you over time and leave you even further in debt that your original purchases. Credit card companies can take advantage of these people in particular by “confusing them with hard-to-understand terms of services and ‘bait and switch’ techniques that land them in financial trouble.”
In the financial world today, and coming during the Obama administration in the United States, new rules will be applied for credit card companies aimed at protecting consumers. Credit card companies will no longer be allowed to raise interest rates on existing balances, only on new credit cards and future purchases/advances. In addition, card companies will need to give more lead time to customers when notifying them on certain changes to their account, which will also need to be more understandable to the average consumer. Credit cards, if used properly, can be a good financial option for families in need of assistance with other bills or looking to buy goods. You can be crippled financially in a hurry if you are not careful; the long-term effects of this are that it will be more difficult to obtain loans for homes, cars, etc because of a poor credit rating from high outstanding card balances. For this reason, great care should be taken with any credit cards you open.
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If your worried about your current credit situation and would like to talk to someone regarding your options to become totally debt-free, seek debt-advise from the experts you can trust at debt-free.org.uk
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