Today there is a growing tool that takes great responsibility to use correctly, that tool is credit. With responsibility, consequences can come from it if failed. According to CBS News, 73% of Americans are in debt. The average amount is close to $62,000 per person. Some people are happy when they are approved for a credit card but is it something to really be excited about? Establishments that approve people for loans, credit cards, and other forms of credit make it seem like you are getting the better end of the deal, if done correctly it can be but most times like the 73 percent fall into a trap where they no longer can control their money, their creditors do. It has come to a time where the majority of people have debt and it’s now normal to them, and to some debt is viewed as an okay thing.
Businesses profit largely off of credit, large enough to where they offer a commission to employees who sell them. Credit Card profit comes from interest charged on consumers (from payments), fees paid by the consumer, and a transaction fee charged on the business. A large part of that mainly comes from consumers being charged interest from not being able to make payments on time. How can you turn the benefit game against them? There are some ways to take advantage of credit cards, one being discounts. This is a strategy that saves you more than you would originally spend with cash. Businesses offer discounts off of products in order to use the card, their goal to either have you spend more or not be able to make payments on time. To take advantage of it, is purchase with it, get the discounts then pay the exact amount in cash to the card (Only spend the amount if you have the cash to pay it right off). The next form that is used to get people to purchase with a credit card is rewards points. By having the card there is generally a point system for using it and after earning a specific amount of points a reward is offered. Rewards vary in many forms some being money off of a purchase or even airplane tickets.
Another good thing credit is good for is emergencies. There may be a time where there is an accident or a car breaks down and there’s no other option to pay for it. This can be helped with credit (Though interest rates are generally higher for small loans). This should always be a last resort. If you have friends or family that can lend you the money or maybe an extra TV that’s worth a few hundred dollars to sell, then do that before having to take out a loan.
To save more money stay away from loans and stay away from paying later. Be able to make payments on time if you do have to take a loan. Don’t fall into a trend of paying later. Owing money to one business may not be possible to pay back if there are multiple payments that “have” to be paid. It all adds up and takes away most if not all your capital. Avoid loans and misuse of credit cards to remain debt-free.
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DiGangi, Christine. “Americans Are Dying with an Average of $62,000 of Debt.” CBS News, CBS Interactive, 22 Mar. 2017, http://www.cbsnews.com/news/americans-are-dying-with-an-average-of-62k-of-debt/.