Credit Cards and Bankruptcy
The unavoidable trap of credit cards and the preying by edges on their victims may rule many to bankruptcy. There is no easy way out of financial situations when income simply does not match expenditure. We all want the latest and best things on the market and many acquire them by loans on those pieces of plastic. The facts are, however, that the interest charged may average that repaying such loans quickly puts it out of reach of meeting it.
edges are not so honourable that they will surrender their biggest money earners, namely the credit cards. The ones who use them are ‘cash cows’ supplying their lenders with huge incomes and great annual profits. It’s like gambling when one puts money in and gets little back in return.
In times past I too was hooked on credit and then some valuable lessons came to hand. The goods I was buying during sales, and so forth, were costing twice as much as they would if the same items were bought for cash. Not only that but much of the stuff filling my cupboards was unnecessary and likely would never be used.
edges and sales go together. One often sees stores offering additional discounts for using a Visa card. It does not take a genius to know how much the business receives back for this slight-of-hand deal. Nor does one need a calculator to check on where the institutions are making most of their money.
At the moment in Australia interest loans on character have never been lower. One can get a mortgage for something like 1.5 percent or already less. That is because the edges know that people will be forced to sell that character at a great loss if they go bankrupt by using their credit cards. With that in mind the offer of extended credit is given to the mortgagee.
There is a move afoot here to force edges to disclose the source of their income while the Opposition wants a Royal Commission into banking practices. With the focus on the current links between credit cards and bankruptcy noticeable in the media it is long overdue.
The best way to avoid the trap is to tear up the cards and have nothing to do with them. Bargains are only such when there is a genuine saving to be had from the buy. If money is correctly managed then buying things for cash will quickly become a priority.