The inevitable trap of credit cards and the preying by banks on their victims may lead 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 through loans on those pieces of plastic. The facts are, however, that the interest charged may mean that repaying such loans quickly puts it out of reach of meeting it.
Banks 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 vast 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.
Banks and sales go together. One often sees stores offering extra 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 property have never been lower. One can get a mortgage for something like 1.5 percent or even less. That is because the banks know that people will be forced to sell that property at a great loss if they go bankrupt through 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 banks to disclose the source of their income while the Opposition wants a Royal Commission into banking practices. With the focus on the ongoing links between credit cards and bankruptcy prominent 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 purchase. If money is correctly managed then buying things for cash will quickly become a priority.
Go on a shopping spree
Don't have enough money to make the best out of the year-end deals in shopping malls? Not to worry! Instead of scouting for deals in snazzy shopping malls, shop through the website of your credit card. You will be surprised to find how many reward points can get you the merchandise that you may be lusting after in fantastic offers available online. Be it toys for the kids, apparel or health and beauty products you are likely to find good deals on e-commerce sites that your card issuer has tie-ups with. So instead of spending money on merchandise in retail outlets do your shopping online by making the best use of your credit cards! You can still visit the malls to experience the holiday cheer, though!
Travel guilt free this holiday season
If shopping is not your thing and you are the adventure seeking backpacking kind looking for a quick weekend escape this holiday season, check how many reward points you can redeem against air tickets. Some credit card issuers have tie-ups with airlines where you can redeem your reward points to get tickets that are significantly discounted. Some other card issuers have tie-ups with aggregator websites that let you are a winner as you may just lay your hands on the fun trip to rejuvenate yourself as the year ends.
Gift vouchers to make loved ones' smile
Are you feeling low for you have not been able to purchase gifts for your loved ones as you are seriously short on money? These gift vouchers could be the perfect gifts for the picky ones in your family who are never quite happy with the choice of others. Gift vouchers redeemed against your reward points can make you both happy!
Save up on annual fees
If none of the above are on your to- do- list and you prefer to curl up under a warm blanket with your favorite book and a warm drink during the holidays, you could still enhance your holiday cheer by redeeming your reward points to pay off your annual credit card renewal fee. This will result in savings that you may not have otherwise anticipated.
A chance to give back
Tis the season to be giving, humble and grateful. The gift of giving back is one that brings in joy unbounded, so if you are feeling magnanimous, Most card issuers allow you to donate your reward points to charities and non-profit organizations, so you can do your bit to give back to the society. What's more is that such donations are eligible for tax deductions too. we hope you will have the opportunity to spread some extra holiday cheer!