Is there a need for plastic money?

Do we need to have awareness on purchasing credit cards with the change in the socio-economic stature?

09:48 29 April 2013

Money, money everywhere but is there really any to actually spend? As a good couple of generations have become accustomed to give into our impulses of “must have it” purchases with credit cards and paying for it later, and now the piper has come calling and wants his money now.

 

That piece of plastic as that binding guarantee repayment created havoc to individuals and companies alike.

 

The idea of a way of establishing a building block of financial worthiness, fitness, and stability with smaller purchases leading to major purchases has become a nightmarish quicksand for which few see any major way out.

 

Focusing on your individual credit card spending habit and establishing a positive routine for your spending will better help manage your credit. 

 

• Review your credit score annually. Most major credit reporting agencies will provide a copy of your score and history once a year. It will also provide a copy for a recent denial (30 days) of credit.

 

• Review whether the credit card spending was part of essentials or disposable/luxury purchases. Essentials include basic food shopping, utilities, etc. while disposable may include going to the hair salon, non-job related memberships, and other luxuries. Ideally, the card shouldn’t be totally relied on for essentials purchases (making harder to get ahead).see which ones can be redirected or reduced from this form of payment.

 

• Reassess which purchases items can be placed on the back burner or totally eliminated to help bring costs more in line with your income. The standard rules of dividing your income into thirds to cover essentials and disposal expenses maybe difficult to constantly maintain. But being able to work within it is the key. 

 

• Look at other options to making purchases such as prepaid debit or credit cards thus eliminating the potential of overspending since a given amount has to be available on account in order to spend.

 

Walking the thin line of good credit card management has become more perilous in recent years. The economy and the employment conditions haven’t made things any easier. But trying to align those credit card purchases to more nonessential purchases will make it easier to keep those balances low, reduce the interest rates, and maintain a good credit score.