How Credit Cards Can Be Your Best Friend Or Your Worst Enemy

Posted by on Aug 30, 2016 in Business | Comments Off on How Credit Cards Can Be Your Best Friend Or Your Worst Enemy

How Credit Cards Can Be Your Best Friend Or Your Worst Enemy

Credit cards are by far one of the most popular yet, most misunderstood banking products on the market.Although credit cards might seem difficult to understand, they are one of the most powerful tools used today to gain credibility with lenders and grow your personal credit score.Living in the United States we come to realize that credit is the benchmark viewed to measure your financial stability and history.Everything from home rental, job applications, cell phone plans, new car, etc. revolves around your overall credit score and performance.

So in essence we can come to the conclusion that credit is a BIG DEAL.Now, credit cards are great, they increase your purchasing power; meaning the ability to buy, and do it without you having to touch your liquid funds; meaning your cash.So overall, is a win – win scenario, you get to buy what you want and only have to pay a small monthly payment to make sure that your credit card remains active and does not default.Now this is where you come to the financial fork in the road.
You have one of two options: max out your credit cards and forever pay the minimum payment allowing you to fall in a vicious cycle of debt or manage your credit to grow your score and also heighten the opportunities of bigger purchases in the future.Unfortunately, whether due to lack of financial knowledge or just lack of care and interest, people tend to fall in the vicious cycle of minimum payments.In the long run, you actually end of having to pay more than they actually used due to all of the interest accumulated in the balance.There is a general rule of thumb when it comes to spending on your credit cards.
Usually it’s been said that as long as you stay within 30% of your credit line spent, you are not at risk of falling into the vicious debt cycle that overspending can cause.Dealing with many clients falling into real financial troubles with their credit cards has taught me something.

I believe that to truly be worry-free and enjoy a healthy balance with debt on your credit cards, you should not be spending any more than 5 to 10 % of your available credit line.Although not a very realistic percentage; especially with the current job market and rising cost of living, it’s more of a goal to look forward to and keep you focused on maintaining a healthy credit card relationship.


Having a credit card is an amazing tool that if used right, can put you in a very good place to grow and build all your financial goals and dreams.If used carelessly, prepare yourself to fall into what could be a never ending cycle of payments and longtime debt for years to come.My advice when it comes to credit; like anything in finance is, do your research, look around for different perks and promotions that some credit cards offer.
Take your time and search the market for the best interest rate to make sure you get the best out of your credit card.

Always make sure your payments are on time and that you keep that balance in check, follow those easy suggestions and I can guarantee you a prosper credit future ahead.Knowledge is the key to simple banking. Let’s keep it simple.