You're Approved....For More Debt!

Document created by she on May 25, 2016Last modified by on Dec 5, 2016
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So here's a little lesson you may not know. Now listen up because I'm only going to tell you this once. OMG I sound like my mother.


Okay so you apply for a store credit card and you get approved. YAY!! You use your newly acquired credit to purchase your necessities however since you have more money (credit) to work with than in previous times now you are able to splurge a bit. So you rack up a nice little $300 tab ($75 on necessities; the rest on "just stuff") on your card which has a maximum limit of $350. No problem; right? So 31 days later the bill is due and since that time you've made no payments on your account and in fact found yourself spending the last $50 for more items you needed. Go figure huh. Now you are ready to pay your bill and you see that you only have to pay $25 (minimum balance due). So, because you didn't have the extra $350 after paying your usual bills you decide to only pay the minimum balance due and pocket some cash. Win-win huh? Not exactly. If you're like most people NEW to credit or just don't care you didn't stop to read the fine print. After the due date that $350 has now increased a third or even doubled. You didn't have the original balance now where will you get the balance plus the interest? Well don't fear. LUCKILY, the lender allows you to continue making minimum payments on the balance accrued which will probably take over a year plus to repay. Now isn't that nice? So all in all kids, what am I saying here? USE CREDIT WISELY and NEVER SPEND MORE THAN YOU CAN REPAY IN FULL each billing cycle. Also, it may help to know this, there are people who invest in credit card debt and make money when you pay interest charges on that debt. So knowing that, do you really want to pay people that invest in the off chance that you will not pay in full thereby accruing interest charges thereby increasing your debt?? Moral of this story: Keep your 2 cents (your money) by using common cents (your noodle) when making choices regarding the use of credit.