One area of concern with credit card users is their possible inability to repay their cards when the monthly bills arrive. In some cases what had originally been small month to month balances eventually transformed into big balances with big monthly minimum payments. Not only are you finding it difficult to pay down the balances, but you are finding it more and more difficult to meet minimum monthly payments. How did you get there? Well, the answers may surprise you but I can tell you this: it has something to do with your types of purchases above anything else.
It doesn't take a whole lot of effort to run up credit card bills. Oh, sure, if you buy that plasma television, outdoor furniture set, or pay for a weekend getaway with plastic, at some point the bills will come do: usually within a few weeks after your purchase!
However, it is often the little things that cause credit card woes such as:
Using your credit card for food purchases. While this is convenient and can result in a ton of points from your rewards card, it does cause you to do one thing: overspend. Perhaps that sirloin you would have bought only twice per month if you paid it with cash. With a credit card, you don't necessarily think about the payouts as money technically doesn't leave your wallet at the cash register. Only when you pay the bill is payment due, but by then you're looking at paying the total, not individual purchases. Bet you don't examine your bill that closely either!
Using your credit card for gas purchases. The pain at the pump is being felt by all with $3 per gallon gasoline common. One way that your pain is minimized is when you make purchases with your credit card. Sure, in most cases you must pay by credit - who accepts cash? - but selecting premium when you can get by with regular and then running inside to pick up a pack of cigs, beer, and snacks and putting that on your credit card can really add up. Quickly too!
Using your credit card for drug store purchases. CVS, Rite Aid, Walgreen's, and Eckerd all take credit cards. They come in handy when buying prescriptions but are costly when you add in candy, personal care items, food, and the like.
What is common about all three categories I mentioned? Well, most credit cards will double or triple your points for gas, food, and drug store purchases. They know about your tendency to overspend and will reward you accordingly. Unfortunately, your interest charges cancel out your rewards points, but you didn't realize that now did you?
Joseph is the proud owner of Lender Guide, a website that will explain everything you need to know about Finance Matters. We invite you to visit our site today and see what we have to offer.