What Every Person Needs to Know About Credit Cards

What Every Person Needs to Know About Credit Cards
  • Opening Intro -

    Every time that you swipe that credit card, the bank is loaning you money. Money, of course that you have.

    Wait... you don’t have the money?


Credit cards:

These beautiful plastic cards may seem like magic to most but are actually ways for banks to catch their pray. Every time that you swipe that credit card, the bank is loaning you money. Money, of course that you have.

Wait… you don’t have the money? When the end of the month shows up and you have to pay your credit bill, you may not always have the money to pay it back. That is when the cycle starts.

The Cycle:

The cycle stats with you not having the money to pay off your credit bill. The bank then puts severely high interest rates on the money that you cannot pay back. Because of these high interest rates, you find yourself unable to pay off your credit again the next month.

This cycle keeps repeating and can result in thousands of dollars lost. This is how the bank makes money off your mistake.

You may think that the bank should not be allowed to do such a vicious think to their customers. That should be the case, but you actually did agree to it when you signed the contract.

In tiny print, the bank allowed themselves to hack up interests rates if you could not pay off the credit bill. This cycle may also be started if you pay off a credit card bill a day late. The companies can catch you on any mistake that you do.


The average credit card company charges an APR of 20 percent without you missing a single bill. This is because they are loaning you money and you have to pay them back with interest.

For example, if you buy a TV that costs 500 dollars with a credit card, the actual amount that you would end up paying for the TV would be 508.33 dollars.

This may not seem like a large amount but it does add up. If you keep using your credit card to buy things, the amount extra in interest that you could start seeing would grow and grow. This is all going to the banks.

Long Term Affect:

All of these bills add up over the years and can take a big toll on your cash, especially if you get caught in the cycle. If you make a mistake, it could also end up affecting your credit score which could increase your rates and affect many other financial aspects of your life.

other valuable tips:

Remember that there are many other options out there for buying thinks. If you insist on using a credit card, always be extremely careful of having enough money to pay for it so that you do not get stuck in the cycle. Credit cards can help you a lot but can hurt you even more.

Image Credit: Pixabay

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Consumer Tips reference:

GUIDE: card purchasing management


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Categories: Credit Cards

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