Categories
credit credit card

Financial Abuse Prevention

Do you carry credit card debt with you all the time? Do you understand that if you do that to one person then it is ruinous to your credit? Credit card debt is a problem that many of us are constantly dealing with. If you are seriously considering using a credit card or more specifically, a paper ATM, you are in for a pretty rude surprise here. Today, a large number of US citizens are among the most seriously considering the use of credit cards, the legality of carrying plastic, legal procedures and methods for protecting your property.

If using a credit card will make any sense to you, you should always look closer than you would otherwise because this is a very serious subject for a number of reasons that I will explain below.

1. Credit cards are not something that the general public is ever considering for their first use. When you are only a teenager, you probably didn’t just use your credit cards to buy clothes, gasoline, and other basic necessities that you can’t even afford to afford to buy yourself. What kind of garbage can you pay for with your credit card money will change when it is not even a store receipt?

2. There is a misconception that using a credit card to pay for certain necessities — such as gas, to purchase a certain item through your favorite store — is a choice you should opt for the other hand. An article by Mike Miller about the dangers of using credit cards in lieu of cash is absolutely killing this argument.

3. Credit card use without a credit card is worse than other forms of credit (such as mortgages or gas subsidies) and it is far more common than you might think. Think for a minute about how many major banks use cash. Here in the US, there have been a variety of fraudulent legal actions from small businesses to landlords. If it sounds like typical banking behavior, it is.

4. Why is it that many people end up in jail for using credit cards instead of money? The answer is very simple. If you are in jail, using a credit card to help pay off debt should be viewed as a form of bail and you should avoid using it even if you are 100% sure you will not be sentenced to time in jail.

5. If you own a home, credit cards do seem to be becoming a more commonplace use of your money. In fact, many home loan borrowers have taken advantage of credit cards to pay off their credit card bills and make small monthly payments toward the smallest amount of debt.

According to the Survey of Consumer Finances by the Organization for Economic Cooperation and Development (OPED) — http://www.equityeconomics.org/publications/debt/statements_reports_2004.shtml — one of the largest surveys of consumer spending patterns in decades, the nation as a whole is one of the most debt-ridden economies among developed countries. And in order to avoid the terrible economic effects of poor credit, many people are risking jail time for using a plastic for the sole purpose of borrowing cash.

In an article for the Wall Street Journal entitled “Myths And Facts About Credit Card Debt” which was originally published by The Daily Mail & Financial Times, Miller reports that more than one in four people in the US do not own a home, and one in four people do not own an automobile. “Nearly 40% of adults in the UK have used credit cards only to make mortgage repayments, according to a survey of more than 40,000 UK adults conducted on 0 per cent mortgages by RealSellers.” Miller continues to go on to state that the survey also showed that, “Nearly 40% of college students have a credit card, but only one in five have used one.”

Don’t even get me started on the fact that using credit cards without cash is the most financially empowering or empowering experience you could possibly imagine. As a matter of fact, if you have ever experienced the thought of having to carry a significant monthly balance from one month to the next, you probably already have. How did Miller come up with this information? I guess he could take a guess, but I’ll ask!

This is a simple, if very important discovery that will eventually give you a better understanding of the hidden dangers of carrying money.

The first problem (not a lack) with using cash as a means of borrowing is that it is often, mismanaged and therefore a big, bad mistake in the wrong.

According to Professor John Bogle, director of the Lombard Center at the New School (http://www.nypl.org), where Miller was interviewed, “Most Americans find cash a big, bad mistake. It could be an administration error or they’ve pulled the wrong card in the mail and it’s been sitting in the wrong place for too long.