Credit Card

Credit cards are a type of funding that people apply for, then misuse with disastrous results mainly because they are so easy to get. A borrower can apply online, through the mail, and over the telephone. There are millions of companies vying for the business of people who need an unsecured loan. But along with credit cards comes the associated debt if the funds are not used wisely. This is a major problem in America, and the situation is getting worse daily. The problem does not lie with the lenders but with the consumer. If used wisely, unsecured loans can help with business or personal transactions, but should be cautiously used to fund emergencies. The difference is in the attitude of the spender.

There are good reasons to use these plans. For example, if person wants to track expenditures for a business or for personal reasons, these loans offer detailed tracking. Or if a person doesn't want to carry large amounts of cash, he can use these types of loans. If a person must use a credit card, he should pay off the balance as soon as he receives the bill. They can carry very high interest rates and may include large fees and huge late payment charges. If the borrower only pays the minimum amount each month, the repayment period can stretch into years and cost thousands in interest charges.

Behavior related to credit card abuse has caused thousands of people great hardship and even caused them to declare bankruptcy. A person who wants to take out an unsecured loan of this type must understand his own spending habits and try to avoid carrying credit cards when shopping. This loan is only a tool and should never be used to purchase items outside the borrower's budget or for impulse spending. They are not an emergency fund and shouldn't be used unless absolutely necessary. A better plan is to save the money and buy the item when the balance is high enough. Delayed gratification is an art that must be practiced.

Proverbs 22:7 reminds us that "the borrower is servant to the lender." It is easy for a borrower to get in over his head in credit card debt. The cycle of borrowing and spending that they promote is easy to become entangled in. There are many companies that are ready to assist a borrower if he needs help with the debt they carry. Credit cards can be a great tool when used as intended, but they are a financial trap for the person who has not limited his spending.