Credit card debt amounts to hundreds of billions of dollars all around the world. Most people use credit cards due to their convenience, but there are certain risks that aren't immediately obvious to the consumer. So here are five great reasons to
eliminate your credit card debt.
1) Credit Companies Hold All The Cards.
When you owe money to a creditor they own a part of you. For example, they can change the terms of your agreement whenever they want, many times for any or no reason at all. In most cases, all they have to do is to send you a letter giving you 14 days notice of said changes.
For example, they can increase the penalty for late repayments or going over your credit limit. And if you don't like it...there's nothing you can do apart from moving your debt elsewhere. They can even change your interest rates just because they feel like it. Universal Default….What a beautiful thing.
But the moment you make the last repayment on your credit card debts, you take control of your financial situation and take the first step towards financial freedom.
2) Most Credit Cards Have A Variable Interest Rate.
In the same way that your lender can change the terms of your agreement, they also have the power to change the interest rates that you pay on your accounts.
You could find yourself in a position where you make credit card purchases at 9.9% APR, miss one repayment date, and end up repaying the rest of your debt (in addition to the late payment fee) at the penalty rate of 25.9% or even higher. Such an increase could add years and thousands to your payments.
This leaves you with two options.
a) Accept the increase and devote more of your life and free cash to increasing their already vast profits.
b) Spend more time and effort looking for a new credit card deal with a lower rate. While it's always a good idea to pay attention for a better deal on your cards, there's no guarantee that your new lender won't increase their interest rate a few weeks or months later on your new account.
3) Special Credit Card Deals Are Extremely Fragile
Credit card companies are only too keen to grab your business by offering special deals and promotions. But they're just as keen to remove them from your account the moment you breach one of the many terms and conditions of your loan agreement. That’s why it’s important to read and become familiar with the terms of your loan agreements.
Six months interest free credit on balance transfers, holiday periods and ultra low interest rates will all be withdrawn if you miss one payment, and that's before you consider the various late payment penalties.
Special deals, incentives and discounts are only worthwhile if you continue to repay the right amount on time every time, no exceptions.
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