Free From Broke

A Personal Finance Blog for Regular Folks

credit cards

Is It a Good Idea for the Credit Market to Ease?

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For the last couple of years, we’ve heard about the tight credit market. It’s been more difficult to qualify for credit.  Even credit card issuers reduced the amount of money they were providing.  However, mailboxes are starting to see an influx of credit card offers, and things are getting a little bit easier (although we are still far from the heady days of easy money seen in the years leading up to the financial crisis).  It might be a little easier to get approved for a loan or credit card now than it was last year, but that mean it’s a good thing?

Do We Really Want More Credit Available?

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Send Credit Card Companies A Message By Using Cash Only

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A few years ago, it was a credit card user’s world. As long as you paid on time and didn’t go over your limit, you could have your choice of credit cards and interest rates.  However, with the Credit Card Accountability, Responsibility, and Disclosure Act (CARD Act) that went into effect last year, meant to crack down on credit card companies, consumers are finding that they are paying higher interest rates.  In addition, it can be harder to negotiate a lower interest rate.

I had a credit card for over 15 years that routinely offered an interest rate below 10%.  Now, the interest rate is 15.99%.  When I called to have it lowered, they would not negotiate with me as they had in the past.  When I threatened to take my business elsewhere, they were unfazed.  “Sorry,” I was told, “there is nothing we can do at this point.”
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Different Kinds Of Bank Cards

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There are a number of different kinds of bank cards a person may come across in the course of their financial life – ATM cards, debit cards, credit cards, and prepaid debit cards.

All of these, as one may gather, work differently – and how they differ is an important thing to know in order to wisely use each kind of card.

The Different Bank Cards You Might See [Read more…] about Different Kinds Of Bank Cards

The Time I Found A Fraud Credit Card Charge

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Did I tell you about the time I found a fraudulent credit card charge on my statement?

So I open up my American Express bill and look over the charges.  (You do check your credit card charges don’t you?)  I glance through the charges and I notice the restaurant bill for a dinner we had was more than what I remember.  I went through my receipts for the month and pulled out the restaurant receipt.  Sure enough the charge on my statement was more than the charge on my receipt.

Here’s what happened:

When I paid the bill I left a cash tip.  On the receipt I crossed out the tip section.  Somehow, someone at the restaurant was still able to charge my account more that they should have.

[read more about my credit fraud experience]

Credit Cards Are Just A Tool

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I wrote two articles recently that looked at two different arguments about credits:

Credit Cards Suck!

Credit Cards Don’t Suck, You Suck!

You can imagine I received a vast array of opinions on the matter between both articles!  Credit cards cause heated debates with lots of people either loving them or hating them.

Let me tell you what I really think:  Credit cards are just a tool!

That’s it! They are a tool just like money is tool.  They are neither good nor bad.  See, it’s all in how you use them.

For many, credit cards are a useful tool that allows them instant loans for purchases; online payments; rewards points; builds up credit history; extends warranties; tracks spending; and more!  Odds are these people are responsible spenders who pay off most, if not all, of their balances every month.  Credit cards help them get what they need and add a few perks as well.

For others, credit cards are the bane of their finances! For these folks credit cards have high rates; exorbitant late fees; unclear terms; ruins their credit scores; creates a temptation to spend, and worse.  Many of these consumers spend way too much and don’t keep a good enough track of their finances and budget.  For them credit cards are horrible.

The point here is that credit cards, in of themselves, are the same for both types of users. The cards don’t really change.  How one uses them changes!

In my credit card history I’ve both loved and hated them.  At first they were this exciting piece of plastic that represented my financial freedom.  Then that freedom led to chains of debt and resentment.  Now that I’m out of credit card debt I understand that it was me all along who controlled what my credit card experience would be.

So if you hate or love credit cards, or your emotions run somewhere in between, understand that you are the master of your destiny.  You control your spending decisions so it’s up to you to decide whether credit cards are a useful tool or a useless tool!

How do you feel about credit cards?

Creative Commons License photo credit: Fosforix