Category Archives: Financial

Financial

Why and How Credit Card Abuse from Borrowers is so Rampant

Published by:

A credit card is a useful tool. Unfortunately, the pursuit of “more” and “better” has often perpetuated a borrowing strategy that is anything but effective. In an ideal scenario, a credit card would remain largely empty for the majority of the time, and be used sparingly for necessary items. It can be used in emergency situations or to account for a big and vital purchase.

Many people allow credit cards to take control of them and it leads to a need for debt consolidation. Debt consolidation comes in many forms, but the main angle which will be looked at here is consumer debt consolidation. Specifically, credit cards.

Credit Cards as Short-Term Loans

Credit cards are little more than short-term loans. They should be used as such. People do not generally receive a loan and continue to add to that loan as they are paying it off. They have a loan for $10,000 and use $10,000 of it for school or some other purpose. They then pay off the loan. They do not extend it out to $20,000 and add to it continuously.

Credit Cards As Protection

Perhaps this is the flaw in how credit cards are used. Credit cards can seem like financial protection in the sense that a person is able to spend to the limit provided. But, it is not active money but future money. It is not protection in the long term, but an alternative to use sparingly and as a short loan.

The above may potentially be one of the reasons why credit card abuse is so rampant. Consumers are borrowing incorrectly and they are running into some legitimate traps. The problem does not rest with the lenders who are only offering a service. The problem is in how they are used.

Debt consolidation can put borrowers where they need to be. Borrowers can see this site to get some grounding on their borrowing methods. The fault is not in the lender. It is in the borrower, and accepting this responsibility is the first step to making it right. Limit card usage despite how hard it is, and keep it much simpler.

Financial

Debt Consolidation: Getting a Grip on Having Too Much with Too Little

Published by:

The problem with credit cards is not the actual existence of them. They are okay and can be used sporadically to great use. The problem is with how they are typically used. Credit cards earn a bad reputation for being financial pitfalls, but the pitfalls only happen when borrowers slip up in the method of how they borrow.

The problem also happens when there is too much to go around. To heal from deep credit card debt, borrowers need to understand that they have too much with too little. In other words, they have too high of a borrowing limit on their cards with too little money coming in.

The Credit Card Dilemma

Debt consolidation can put borrowers back on the right path by limiting their borrowing range. Some people may use the excuse of building their credit to borrow big and wide with multiple cards. It is more sensible for credit to have one or two cards that are healthy than five or more that are all used. There is also the element of restricting oneself for the sake of removing stress triggers.

The Debt Consolidation Rule of Thumb

Borrowers can begin to consolidate debt without having to file paperwork, trade debt to another source, or do any of those things which could be too cumbersome for their own good. The rule of thumb is to find the card with the lowest balance. Place the majority of attention on paying that card to zero. Once that card is gone, move extra finances to the next lowest until all the effort is placed on the largest card.

The cards can stay active. Having open credit is fine aside from some marginal usage and annual fees. It is the standard of consolidation. Having a few strong cards is valuable and useful. The problem with credit is in the borrower, as credit cards are short term loans that are often abused as licenses to spend more than what one is making. Borrowers going here in this direction can learn to organize their debt and consolidate it down to one or two distinctive sources of credit.