Credit Cards Can Change Your Life…Literally!
If you have lived in the United States for over a year, you probably know what a credit card is. They are small pieces of plastic that contain information to attach you to the lending account. Consumers can use credit cards for just about anything they would ever need cash for. However, what many new to credit card consumers don’t know and unfortunately learn the hard way is that credit cards can literally change your life. So, in this article, I am going to go over 2 very drastically different credit card scenarios. One will be the credit card meets financial stability fairy tail and the other will be debtor meets bankruptcy nightmare! If you are new to the proper use of credit cards, I would suggest reading this whole article and making the changes necessary to move toward the fairy tale!
Credit Card Meets Financial Stability Fairy Tale
Meet Angela. Angela is a young woman who graduated high school last year. She is now on her way to college. Knowing that credit cards can be a much needed financial cushion, Angela applies for a student credit card. When Angela gets her credit card in the mail, she uses it sparingly. Before swiping her card, Angela thinks about if she is going to be able to pay off the purchase within 3 months. Satisfied with the results of her pondering, Angela decides to make the purchase she wanted.
Angela goes to school the next day. Clear headed she is able to pay close attention to her class. She was given a pop quiz but, because she had studied the night before, Angela aced the quiz! Walking back to the dorm from her class, Angela runs into a new guy. She is relatively attracted to Brian and decides to spark up a conversation. This conversation soon lead to a prosperous relationship.
Unfortunately, 3 weeks later, Angela falls sick. Unable to work, Angela must survive on her credit card funds for 2 weeks. The good news however is that because Angela used her credit card sparingly, she had the ability to do this. Once she felt better, Angela started to triple her minimum payment on her credit card to make sure she paid her balances within 3 months. Doing this all through college, Angela graduated with a great G.P.A. and a great F.I.C.O. Score!
After graduation, Angela and Brian decided to get married! Using their amazing credit scores and their income from their great college grad careers, Angela and Brian were able to buy the house and cars of their dreams. They experienced nothing less than a fairy tale ending!
Debtor Meets Bankruptcy Nightmare
Meet Christina. Christina is a young woman who graduated high school last year. She is now on her way to college. Thinking that she might come across some financial hardships, she decides to get a student credit card. Unfortunately, when Christina gets her credit card in the mail, she decides to go on a shopping spree. First stop, Burlington! She spends her entire $7,000.00 credit limit in 2 weeks.
Christina gets her first credit card bill in the mail and realizes she has made a mistake. Knowing that she will not be able to pay the $800.00 monthly minimum payment on her credit card, she tries to think of who else she can borrow money from. Christina calls her mom and dad but being outraged at the horrible financial decision she has made they have decided not to help. Christina is now forced to work 3 jobs!
Unfortunately, 8 months later, Christina drops out of college. Luckily however, at the fast food burger stop where she works, Christina meets Todd. Todd is a middle age college drop out as well. Falling in love, Christina and Todd decide to get married. After 6 years, they are finally able to build up the savings to go to the local courthouse and get married! I bet you can finish the nightmare from here…
The Moral
Unfortunately, too many consumers these days use their credit cards loosely. Not thinking about the payments to come, many people find themselves swiping their credit card for just about anything. Well, today, I challenge you to stop! We all have made stupid financial decisions. Including me! How do you think I’ve learned all of this. My hopes however are that you avoid the mistakes that many consumers make with their credit cards!