Understanding Credit Cards

Many well documented factors have contributed to America’s troubled economy.   I’d like to focus on my fellow Americans seemingly insatiable desire to live beyond their means.  It seems that we have a deep seeded need to keep up with and even surpass the Jones.  Obtaining self worth or a sense of security through material stuff is leading many to financial ruin.  

Financial institutions have played a BIG part in the current financial meltdown.  In an effort to bring in additional customers, credit card companies began lending to more and more high risk customers.   Extending credit to consumers who were unable to repay  the debt put everyone at risk.  The poor choices made by the credit card companies and the people who use cards without the ability to repay, is greed in its worse form.  

Understanding your financial situation is vital to making sound financial decisions.  Creating a budget and determining where credit fits into your finances is the key to using credit cards properly.  Before making a credit card purchase take a moment to honestly evaluate whether you truly need the item and your ability to repay quickly.  Being able to distinguish impulse buys from necessity items will go a long way in helping you avoid common credit mistakes.