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Credit Card Debt

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When I was fairly naïve, I listened to an older sibling about just getting a credit card.

Since I was a teenager I had built a credit history and never made a late payment.

However, plenty of Americans fall into the trap of paying only the minimum balance.

The average American has thousands of dollars worth of credit card debt.

Many cardholders get into financial trouble by making a series of charges that taken alone are hardly threatening but when combined can accumulate quickly into overwhelmingly large balances.

Cardholders elect to pay via a revolving balance, yet wouldn’t dream of taking out a bank loan for the same amount.

I actually tried taking a loan out from the bank. The interest rate on the bank's personal unsecured loan is lower than rates associated with credit card companies.

For a very brief moment, I was living under credit card debt. Debt crushes your spirit, particularly when these companies have the right to charge the consumer nearly 30% in monthly interest. These charges do not include late fees.

I was not aware of the variable interest rates and other issues that arise when using credit cards. Sometimes, these interest rates can be negotiated and the consumer can actually set up an automatic payment to ensure that they are never late.

The wisest thing to do is never carry a balance and if one must carry a balance open a new card with a 0% APR.

Credit cards are not evil, but when you spend more than you make, these cards can damage your livelihood.

Companies are allowed to raise the interest rates on these cards once you go over the limit, miss a payment, or do not pay in full every month.

Credit card companies dislike the consumers who never carry a balance. Credit card companies make all their money in fees and interest.

Credit card companies fear that consumers with unsecured debt will default. These companies are also wary of settlements.

One solution to this problem is to use a secured line of credit from a bank. This credit card is actually just a pre-paid card that builds your credit history.

Credit cards are meant to be used very responsibly; however, that is seldom the case. If one uses a credit card, one should never carry a balance or pay late.

Many people in this country have more than one credit card. As a nation, we have embraced the theory of revolving debt. Some use credit cards for all their purchases because they claim these cards allow them to keep better track of their expenditures. I really think that the ability to use credit cards wisely is becoming increasingly difficult as the job market continues to lay off skilled American workers.

Tyler Tervooren, author of the blog Advanced Riskology, uses credit cards for almost every purchase he makes, but he pays the full balance every month so he never owes a finance charge.

"My strategy is to use them to accumulate frequent-flier miles that will allow me to travel the world practically for free," Tervooren says. "I track all my spending and stick to a budget using Mint.com."

Mint.com is an online money management and budget-planning site.Still, most people carry credit card debt, Farrell says. "So many of us say we pay off our credit cards at the end of the month, but in reality we may be carrying $1,000 or $2,000 in debt," he says. But for those who are disciplined enough to actually carry a zero balance, this is a great way to use a credit card.

Even internet marketers, bloggers, and entrepreneurs such as Chris Guillebeau must admit that in order to become responsible users of credit cards, consumers must enlighten themselves and apply for the right cards. It takes a great deal of time to learn which cards have the most advantageous rewards.

Certain credit cards offer more benefits than others. Chris Guillebeau uses frequent flier miles. Credit cards offer convenience, but the quick fix may have devastating long term effects.

Financial literacy seems to be absent from the consciousness of most Americans. For instance, the most I ever got in debt was less than $2,500. And, this debt was paid off within a week.

Now, I do not use any credit cards and will neither endorse nor subscribe to the theory of revolving debt.

I like researching these companies in my spare time. I particularly like the idea of building credit history, which is actually not necessary if one never plans to get a mortgage, take out a loan for a car, or real estate. But, for the savvy investor using the bank's money to become wealthy may work.

Being an adult is not as exciting as I imagined when I was a kid. I could not have envisioned paying off student loans and other expenses such as housing, and groceries.

I wish I had saved all that money I made when I was a a child working for my father as an apprentice at his auto shop.

I do not think that my parents really explained the power of compound interest.

Life is definitely not cheap, it's very pricy and I am so glad that although I have some student loans, I do not have any kids or cars.

I'm set to be debt-free by the end of this year.

I am getting my financial house in order and will definitely work smarter and harder. I want to launch my first enterprise as a solo-preneur.

Although 90% of businesses fail within the first five years, it would be nice to actually test this theory and see if I might actually succeed. Even if I fail, it's better to fail fast and learn what works and what doesn't.

I know I need to become more disciplined and use my limited time to innovate and construct a better future for myself and my progeny.
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