The Whole Tangle of Credit Cards and Credit Reports

Credit cards and shopping on credit is fast becoming a routine part of our lives. It is easier to locate a credit card agent today than finding a free cab. They are at the airports, malls, offices, and other institutions, searching for more customers with better and better incentives.

DexPlatform Ads

It seems like everyone must have a credit card. Which means everyone must buy things on credit. Which means everyone must deal with a finance company as a debtor and repay the amounts every month. Why this must be so, and how do come to grips with this whole idea of credit shopping is the subject of this article. On the face of it, it is a lot easier to use credit cards as a single source of payment. Whether at physical locations or online, it works everywhere. Although holding a credit card was once an issue of prestige and showed one’s class, this aspect seems to have become less important as more and more people continue to acquire them on each passing day. Indeed, one can even make purchases for amounts more than we hold in the bank. This is the loan aspect of credit. The financial institution considers us a reliable debtor and grants us an anytime loan for any product. The point to think over is why one should purchase anything on credit, when it means repaying the amount with an added interest. Yes, one need not pay the whole price now, which is what the paying through installment concept is. The only difference is this – credit card company finances your purchases, and you pay them the installments with interest. A very basic principle of managing one’s finances is never to be in debt. It is a moral principle as well. It may appear harder to shell out cash and make a real on the spot purchase when you are going through hard times, but that should alert one to take care of the budget and improve the situation. The idea becomes a real tangle when credit histories are brought into picture. Adverse reports of defaults, late payments go into a public sphere accessible to any financially interested party. If you are in debt, that is one mark against you. Others knowing and inquiring about it becomes another point scored against you. It makes sense to the author to limit the use of credit cards to urgencies, and stay out of debt, no matter what.