Credit Card Abuse in America
Credit Card Abuse in America
Credit Card Abuse in America
America has become overly dependent on the use of credit cards and worse at budgeting. Many households are living paycheck to paycheck and it is taxing on those individuals mentally. The thought of having to figure out which bills to pay this payday and what cards to put them on is both stressful and unproductive. People resort to using credit cards to pay off basic bills, buy groceries or even pay other credit cards. While paying bills with credit cards gets the debtor paid on time, most individuals are missing the bigger picture: the debt is still there after the payment has been made, and it's getting bigger. A lot of credit card holders may not realize the terms of which repayments are actually putting them deeper into debt than they can handle and their credit rating can suffer from lack of knowledge. The price of using credit cards is higher than most realize.
Credit is everywhere; you cannot deny that. You can walk into most department stores and apply for a different credit card. I feel most people do not realize the consequences that can come from depending on and acquiring too much debt from credit cards. According to Emily J Minor (The Palm Beach Post News, 7/2/10) the average credit card debt in America is $15,519. This is outrageous seeing that it's more than a quarter of the nation's average income before taxes! Americans are spending more than they can save, and that is having a negative effect on the economy and our livelihood. Many are living paycheck to paycheck, and some are taking loans against that next paycheck before they have cashed the one they just received. Credit card companies are loaning money as "cash advances". People use them as if it was free money, and they worry about repayment later. Most people do not ask questions regarding the APR of such loans and do not realize they could be hurting them in the long run, racking up fees and more debt than they are able to handle, especially when only paying the minimum monthly balance. So you may want to pay for your haircut or manicure with a credit card, but you may just end up paying for it 10 fold in the end. It's better to just wait.
Credit cards have been the cause of many financial woes, but also have their place and advantages. Without them, it would me more difficult to purchase goods online or by phone (meaning no Pillow Pets or other "only available on TV" items). They also assist those who do not earn a steady income to buy the things they need because their income is not as high this month as it will be the next or the previous month; food, medical care, clothes, transportation costs. With unemployment on the rise, many people are reaching for their credit cards to make ends meet. They are paying rent, power, gas and food bills with their plastic because it's the only way for some. But what will they do when the credit runs out and their credit rating begins to suffer as a result? This is when" woulda, coulda, shoulda" comes in. Early planning is essential to your present and future financial security. Yes, you need to establish credit. Credit cards are a good way to start, but you have to be responsible. Abusing the credit cards early on will only make it more difficult to make larger purchases later on, such as a car, business or home. I know from personal experience the feeling of a new credit card, knowing what you can now do with the card and even though I don't have the $100 cash now, I can buy the Guess jeans and pay for it later, even in installments if I need to. But what I learned later was that charging up the credit card and not being faithful with my payments in full each time they came around, would scar my credit, make it difficult for me and my husband to buy our first home for our family, and in return, make it almost impossible to save any money as we are making hundreds of dollars in credit card debt payments monthly and leave me fearing of wage garnishments and liens. That kind of stress is not necessary and could have been avoided had I been instructed early on exactly what could happen. It's not healthy financially, mentally or physically.
Credit cards are very susceptible to fraud, as many credit card numbers are stolen and used to make such fraudulent purchases. This is very dangerous and will prohibit people from making larger purchases in the future, such as a home or vehicle. There are all sorts of ways a criminal can obtain your credit information: camera phones, cloning swipes from ATM machines, dishonest cashiers either taking the credit card numbers or hitting the cash back button and pocketing the cash, and online phishing. Online phishing can occur even when you are making a donation to a reputable organization, but what you are unaware of is that you are being targeted by a theif trying to use the company name as a frint to gain access to your personal information (Microsoft Safety and Security Center) Just as you would not allow your social security number to be available for anyone's eyes, you should be just as protective over credit card information. I do know, from my own experience that by swiping your card at an ATM that looks like it could possibly have been tampered with can have serious consequences. My husband swiped his debit card at a gas station kiosk while getting gas one afternoon and his credit card was cloned. Criminals stick a very small device onto the ATM where people swipe their cards that copy the cards information and at a remote location, another card is made and they begin to make fraudulent purchases. So, if one was to simply rely on using their credit and debit cards for every single purchase, they could easily be put into a serious bind financially if they were to become victims of identity theft.
Americans should be educated on how to save money. Credit has its advantages and its place, but it's not something that should be heavily relied on for everyday purchases and day to day living. Credit should be something that a person uses only if it's absolutely necessary and then should be paid in a timely manner. In an ideal world, everyone would be able to save money, use it for their everyday needs, and credit cards should be used as infrequently as one uses a payphone nowadays: only in emergencies.
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