Debt – a four-letter word if ever there was one. So easy to get in to and so very difficult to get out of. Credit card companies make it especially simple to get yourself in over your head by sending out pre-approved applications touting fabulous terms. This can be nice if you are just starting out in the world and need a way to establish credit. But what if you already have one or two cards and are struggling a little with your payments?
You may be tempted by an offer like “transfer a balance today and pay no interest for a year!” Time flies, and before you can believe a year has gone by you may be stuck with an even higher interest rate than your old card charged. Plus, you may have tried to earn cash back or reward points by making additional purchases. Take charge of your credit life by not taking the bait.
Opt Out Options
You can remove yourself from temptation by opting out of receiving pre-approved credit card applications. The website of the Consumer Credit Reporting Industry allows you sign up to opt out. It is quick and easy, but you will have to give your social security number and it will not take effect immediately. Also, credit card companies are finding loopholes to get around it. If a company or store you do business with is affiliated with a credit card company, the credit card company can use this “prior business relationship” excuse to continue to contact you.
Don’t even open them or bring them into your home. If you have a recycling bin, just tear them up on your way from the mailbox, and toss them in (or your garbage can if you must – but please recycle if you can!). Some people worry that identity thieves will get a hold of these things, but that doesn’t really happen. Identity theft is all online these days.
A Little More Fun Option
All those applications come with a postage-paid return envelope. You can help keep the US Postal Service in business by returning those envelopes, but with something else inside! You probably get all kinds of other junk mail advertising. Just enclose one of those in the envelope and send it off with a smile. This method of “recycling” will cause the credit card companies to pay a little extra for bothering you with their junk mail. Over time you will actually see a decrease in the amount of all forms of junk mail you receive.
Credit cards can be a very useful tool for building your credit history and for helping you in emergencies or to buy things without the money up front. But it is important not to let a large credit line beguile you into thinking you can afford things you actually can’t. When you make an expensive purchase with a credit card, you may still be paying for it long after your enjoyment of the item is gone.
When used wisely, credit cards can enhance your life. The Better Business Bureau has a comprehensive guide to help you make good decisions about credit cards. Always remember that anything you buy with a credit card will cost you more money unless you pay your entire balance off every month – before any interest can be charged.
There is so much easy credit available that many people get in over their heads. Don’t let that be you. Arm yourself with knowledge and will power and take charge of your financial life. And if you do find yourself struggling, get help before things get out of control.
The author who contributed this article is Chase Sagum, Financial and Business blogger. Check out more of his content at www.lexingtonlaw.com.