It seems these days that money is almost an imaginary thing
. So many people use digital technology to make payments straight from their bank accounts to pay their bills or buy goods and services. Even when buying items in a store, a quick swipe of your debit or credit card takes care of the purchase. The truth is that not very many people deal in cash these days. One of the reasons for this is that a lot of us live beyond our means and can't actually afford to use cash to pay for many of the items we covet.
Credit cards make it easy to make purchases or pay bills when income is low. In trying economic times, more people fall prey to credit card companies. Many times, credit companies target young adults who more than likely don't realize how credit cards work. They offer some free item upon signing up for the card. Even if the applicant never uses the card, it can rack up annual fees without the person realizing it until they are contacted about their credit debt.
How do credit card companies work? They allot you a certain limit for spending. You swipe the card, and they pay the store or company. You receive a bill at the end of every month that totals up all your purchases, upon which the credit card company charges interest and sometimes even a service fee. You must remit payment by a specific date or you will be charged a late payment fee.
There's nothing wrong with keeping a credit card for emergencies. You might also keep a card just to make purchases each month for purposes of keeping credit on record. As long as you pay off your card each month or only keep a small running balance, this won't be harmful to your credit.
If you do want to keep a credit card, make sure you apply for one from a major company that is in good standing with the public. Read the fine print to make sure you won't be charged an outrageous interest rate. There are also many cards that don't charge any annual fees. There are actually websites that can help you find the best card options.
If you do find yourself in over your head with credit cards, there are easy ways to fix your credit score. There is credit repair software out there that can help you easily manage and dispute credit debt. Taking the above steps can help you avoid this situation altogether.