credit card

Credit Cards Basics for Everyone

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Credit Cards Have Consequences. It's not magic money. It's a loan from a bank, disguised as a convenient shopping tool. You spend, they lend, and you (hopefully) pay it back with interest.  It adds up fast. Ask anyone!

Credit Scores

Using credit builds your credit score. Yes, you do need to build a credit score. This mysterious three-digit number is like your financial report card, influencing everything from loan approvals to rental applications. Use your card wisely, pay your bills on time, and watch your score soar. But rack up debt and delinquencies, and prepare for a credit nosedive. Three companies get all the data on your credit and together they compose your credit score. You have a right to get 1 free credit report every year. This is a smart practice.  Make sure you are not a victim of fraud and be very familiar with your credit history. 


Those tempting rewards and cash back points come at a cost: interest. This is the bank's fee for lending you money, and it can be surprisingly high. Current interest rates for credit cards can range from 10% to 25% or even higher, depending on your creditworthiness and the card's terms. So, that fancy latte you charged might end up costing you double later.


Charge $1000.  Then pay a minimum of $20 every month. It will take 7 years and 10 months to pay off the balance. The total interest is $862.22.  See how quickly that got crazy!  Now imagine doing that just a few times!

Late Fees 

Missed a payment? Brace yourself for the late fee ouch. $25. These penalties can be hefty, often a flat fee plus a percentage of your outstanding balance. A single late payment can snowball into a debt avalanche, so avoid them like the credit card aisle at Christmas.

Remember, It's Not Your Money 

It's tempting to see that credit limit as an endless pool of cash, but resist the urge! Those purchases add up, and before you know it, you're swimming in a sea of debt. Yes, lots of people use them. And lots of people are stressed out over debt. Each American household carries an average of $7,951 in credit card debt in a year. You do not want that!

It is a Huge Business

Banks aren't in the business of making friends; they're in the business of making money. They thrive on interest and fees. You might think there are great benefits. Rewards, cash back, tracking your money.  They are all tools intended to get your money and keep you using that card. Credit cards can be powerful tools, but like any tool, misuse can be dangerous. Use them responsibly, prioritize paying your bills on time, and avoid the debt trap. Remember, financial freedom starts with financial awareness. 

How to Use a Credit Card Responsibly

Yes, you'll need to have some credit. There are safe ways to use a credit card and build credit.

  • Get a Credit card with a $500 Limit
  • Put a subscription on there. Something less than $100.
  • Pay it every money, on time

This will help you build credit. Once you have a decent credit score over 700. Pay off the balance and stop using it. Lock it up!

Save More Money Today!

If you are ready to stop using credit cards and really start saving money, then you need to invest time in managing your money and having a sound spending plan. A spending plan will help you save money every month and also build wealth for your future. It is easy and I can walk you through it step by step. Learn More!

Already Have a Credit Card?

Read this and Learn to NOT USE CREDIT CARDS


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