Most Americans start their adult life with their official initiation into the world of personal finance (or should we just say debt?) … via student loans.
Then as we graduate from school and enter the workforce, we tend to assume more debt as we are initiated into the world of credit cards.
That’s also the point in life that we learn that our level of responsibility and trust as adults starts being measured by the so-called gods of credit.
That’s when I learned that from the time we took on a student loan all through our deathbed, our creditworthiness is measured by a credit score. This credit score is something you really have to take care of if you plan to buy a car, a house, get a home equity, or get more credit cards.
And yes, the lure of credit cards. Doesn’t it feel like it’s the key to easy spending?
No wonder, most Americans are just so burdened with debt.
Did you know that the average American household carries an average credit card balance of $9,333?
What is more disturbing is the fact that households with the lowest net worth (zero or negative) hold an average of $10,308 in credit card debt.
Credit cards are a double-edged sword. You have to learn to use it wisely to build your wealth.
If you succumb to the dark side of credit card use, getting back can be a tough journey.
Here are some credit card traps that you really have to avoid no matter what.
4. Paying only the monthly minimum required.
Sure, it appears that banks are doing you a favor by allowing you to just pay a minimum amount during each billing cycle. However, this really works in their favor.
The more balance you leave on your card, the more interest they can charge you.
If you cannot pay the balance off in full each month, try to pay as much as you can in order to reduce the interest you will have to pay. In the long run, this will help reduce your overall interest charges and help you manage your debt load.
3. Using the ever convenient cash advance.
Sure, credit card cash advances can provide you with convenient, instant cash when you need it most.
However, that convenience comes with a catch.
Cash advances from credit cards are …
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