You were young, fabulous and just graduated. With a good degree you found a job that paid you more than you could imagined. Your father gave you a gold credit card as a symbol of recognising your independence and maturity. On your first pay cheque, you wondered how on earth you were going to spend this money. A while later you bought a car. And you met a girl who earned more than you. ;-) What did you get a year later?
I'd got credit card debts equivalent to two months of my salary.
It was many many years ago. I got out of the financial mess eventually. When I think back, I know I was lucky that I had the lesson early in my life.
Credit card is one of the greatest and one of the worst inventions for modern living. Use it wisely you get your convenience of free financing, free book keeping, free gifts, free emergency funds, free history records of credit worthiness, etc. Use it carelessly, you bankrupt.
I have been meaning to complete this credit card section. Viewing current economy and financial trend of easy credits, credit card debts has became one of the biggest personal finance issues for many households. The ultimate rule of using credit card is never, NEVER, utilise the financing beyond what is given free (the first 20 - 50 days from the day of your transaction depending on your statement date). This means we should pay off the entire outstanding balance of our credit cards statements. Then, enjoy the rest of the benefits come with your credit cards. ;-)
Many people manage their credit cards well through discipline, being organize and careful. Many who lack discipline, who are not really organize and who are probably down right careless (sounded like me) can manage their credit cards well too...with a change of paradigm on life and a simple automated personal system built around their financial transactions. The "automated personal system" refers to the way we transact with our credit cards, the way we pay our credit cards balance, the way we check our statements quickly and effortlessly, etc. It is NOT about using software, it is not about doing record keeping, it is not about scrooge yourself to death.
With such personal system around a person's financial affair, exercising discipline becomes easy, actually extremely easy. This section is about "how to" on managing and enjoying your credit cards, and life. If you had already in trouble, there will be a section on getting out of credit card debts too.
Preventing credit card debt mess
Good practices in credit card usage that you will never fall into credit card debt mess.
Part 1: Preventing credit card mess (1)
Part 2: Preventing credit card mess (2)
Part 3: Preventing credit card mess (3)
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