Saturday 24 March 2018

The TRAP of the modern credit card.

  Posted at  March 24, 2018 No comments
Credit Cards: Legalised modern loan sharks that can change the value of your purchases after you have bought them.

Instant gratification, or the idea that you need to get what you want now, has increasingly made people turn to buying things on credit. Basically, this means buying things we cannot afford.

Marketing strategies that prove too enticing and too good to believe.

Nobody really bothers to read the fine prints in transactions for 0% instalment purchases. But, what is the catch really? You need to look no further than how credit card companies earn their money:

Fees, Fees and more Fees.

A zero instalment plan sounds like a really good idea! Who wouldn't like the idea that you could buy a big ticket item without having to pay a huge upfront cost? But note the processing fees for transactions when you swipe that card. If you end up missing a month of repayment, it might start a spiral of debt you cannot afford because when you cannot pay, they raise the interest.

Many end up just repaying the minimum interest while the debt snowballs. 

People used to buy only things they can afford. How that have changed.

It may seem good to use credit until unforeseen circumstances like losing your job/illness can push people to financial trouble.

Until next time,

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Related topics:
1. About K.C. What is my story?
2. My 3Cs to money/investing
3. Why you need to set aside money for savings first

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