Drastic Plastic (Credit Cards in general)

Member Name: dibuzz

Product:	Credit Cards in general
Date:	04/10/01 (57 review reads)
Rating:

Advantages: handy to carry around, useful in emergencies

Disadvantages: easy to overspend

I have two opinions about credit cards:-
1. They are a Godsend for emergencies
2. They are too tempting to carry around

I got my first credit card 15 years ago and always paid off the balance in full. After my first son was born I used it more and didn't always pay the full amount. Soon I owed quite a bit but it didn't really worry me.

Then I was offered a card with a lower interest rate so I started to use that one too.

Next came one with a lower rate for balance transfers so I got that one as well.

Befor long my husband and I had 12 cards between us but as there was only a few hundred pounds on them we didn't bother.

Soon, however, we realised that we could only just afford to pay the minimum payments each month and it wasn't long before we couldn't pay all the cards each month.

We tried to sort this out by paying the minimum on some of them and transferring the balance on others so although we were covering the minimum payment it was just going on another card.

Eventually we realised that the payments weren't even covering the interest and had to do something about it. We ended up remortgaging the house to cover all the money owed which means we will be paying them off for 17 years but at the rate we were paying it would have taken longer than that just to pay the interest.

We are now going to keep just one card for emergencies only but I will always worry about using it and ending up in the same situation again.

I like to carry a credit card as I feel safer knowing I have it in an emergency but the problem was having so many. We didn't realise just how much we owed until we added them all up and when it topped £20000 I felt ill.

I still think credit cards have their place, especially if you have children but would like to make the following suggestions:-
1. Make sure you pay at least the minimum payment or you will be cha
rged upto £20
2. If you have more than one card keep a running total so you know just how much you owe
3. Keep a note of the card numbers and helpline numbers in case you lose your cards
4. Don't be tempted to overspend just because it is on a bit of plastic. You still have to pay the bill.
5. Try not to pay one card off with a cash advance from another and only transfer balances if it is to get a lower interest rate.
If you do find you are out of your depth with credit cards and loans get advice from the bank or a financial advisor. If we had done that sooner it would have saved us not only money but also a lot of worry

Summary: