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A message for credit card users

It's the packaging that makes credit cards so attractive and people cannot resist the fervor to get one. At the same time, it is the credit card that puts consumers in deep debt. Most Americans do the mistake of buying daily commodities with credit card and activate the endless loop of debt by themselves. Experts say that credit cards should be used for convenience when emergencies arise. But people cannot control the desire to show credit cards at the cash counters; somehow using plastic money has become a status symbol.

The clash between cash transaction and credit transaction also plays a vital role here. Cash transaction often gives an impression that money is going out rapidly as consumers have to pay for the product instantly. While credit transaction seems to increase personal savings, as the total amount of money in your wallet remains unchanged. But a thoughtful study reveals that credit dealing demands more money in the form of interest, financial charges that one could save otherwise.

Top of that credit card companies use different methods to promote their products and magnet more people. Obviously Low Introductory Rate is one of those. Consumers think the low rate would continue forever, but that does not happen. The truth is usually written in the fine print and people hardly bother to read it.

Another critical topic that consumers often miss is the well-known Default Clause that makes consumer helpless in front of the policies of credit card companies. They change their terms and conditions whenever they think, sometimes without any prior notice and consumers are compelled to pursue it. Some consumers and experts have also started raising their voice against credit card companies for scheduling payment date on holidays. According to few it is nothing but a bad tactic to push consumers in debts.

Debt consolidation could be a good option to avoid or remove delinquencies on your credit card account. A smart borrower would like to consolidate Credit card debt before it is tagged as charged off or handled over to a collection agency. Like every system, debt consolidation also has some merits and demerits. Low interest rate, single monthly payment for all the accounts, no more collection calls are few of the merits of debt consolidation. As per the demerit is concerned, some people think that being under debt management program hurts credit score, though most credit scoring models do not consider debt consolidation or credit counseling program at all while assigning points to consumers.

However, as debt consolidation closes the active accounts, it can have a temporary effect on your score. But once creditors are satisfied with the payment plan and receive timely installment for three or more consecutive months, chances are they wonít report the account as delinquent any more and your score is likely to go high.

All the credit card users bumped into debt problem or predicting the same in future: Take care of it before itís too late. Manage the debts tactfully; take help of credit counseling services. And to all the new card users: Keep the card for emergency, if you cannot control the desire to use plastic when you are out to shopping; use debit cards and avoid future debt problems.