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Importance of Taking Control over Credit Cards to Have a Healthy Personal Finance

By Charles Hopkins Published 09/19/2006 | Finance

Importance of Taking Control over Credit Cards to Have a Healthy Personal Finance

Have you ever fallen in a situation like this, went to a shopping mall, exhausted all your cash by purchasing the necessary items only to discover a piece of jewelry in the shelf, you have yearned for but could not find the same thing anywhere else. Now that you have located the piece of your dream, you lack the cash for paying for it and you are not sure if it will still be here the next day. Well, in this age of plastic money, with a credit card in your wallet you are never likely to face such a situation. A credit card makes it possible to spend on those extra purchases that you havent planned for. It also helps you through the times of emergency. But use of plastic money with indiscretion may place you in hot soup.

While one or two credit cards help your personal finance stay in an organized state, more than that may make it complex. Many credit cards may tempt you to make pointless purchases. Many people simply forget to pay the dues of all their credit cards within the grace period, only to be charged with an exorbitant interest which multiplies only too quickly if you somehow fail to make the payment in a particular month. And thus, you go on adding debts to your credit card balances. It is no wonder then to find that credit card debts are the number one reason of bankruptcy in the USA. There are many people who exhaust all their monthly earnings paying for their credit card bills, still far away from clearing themselves of the credit card debts.

So take control over your credit cards simply by cutting off on their numbers. It will help you to keep track on all your credit card purchases and it will be easier for you to clear all your credit card bills on time. Handling too many credit cards means going out of control over your purchases. Even if you are not able to make a timely payment, the interest you have to pay will be much lesser in the case you are handling a fewer number of credit cards.

Then the choice of the credit card company indicates your good credit planning abilities. Why should you stick to your old credit card that charges you a substantial annual fee? Just switch to another company that is offering you a free service. Also compare between the interest rates charged by different credit card companies. If sometimes you have to carry over the payment to the next month, then you should look for the credit cards that charge you lesser interest. Also, look for those credit cards that offer cash or other rewards for making good credit points.

There are, of course, times when you need more cash than you are actually permitted by the limit of your credit card(s). In those situations, do not rush for getting another credit card issued in your name; it will complicate the matter more. If you are in a situation that demands extra credit, simply ask your credit card issuer to stretch your credit limit. Even applying for a business loan is a more prudent decision that accepting a pre-approved credit card.