Credit Cards and Bankruptcy
The inevitable credit card trap and the banks’ pursuit of their victims can drive many into bankruptcy. There is no easy way out of financial situations when income simply does not match expenses. We all want the latest and greatest things on the market and many acquire them through loans on these pieces of plastic. However, the facts are that the interest charged may mean that paying off such loans quickly puts her beyond her reach.
Banks are not honest enough to hand over their biggest money makers, namely credit cards. Those who use them are cash cows, providing their lenders with huge incomes and huge annual profits. It’s like gambling where one puts money in and gets little back in return.
I too was addicted to credit in the past and some valuable lessons came to me then. The items I bought during sales and so on cost twice as much as if the same items were bought with cash. Not only that, but much of the stuff that filled my cupboards was unnecessary and would probably never be used.
Banks and sales go hand in hand. There are often stores offering additional discounts for using a Visa card. It doesn’t take a genius to figure out how much the business gets back for this easy transaction. Nor does it need a calculator to check where institutions make the most money.
Property loan rates have never been lower in Australia right now. One can get a mortgage for something like 1.5 percent or even less. This is because the banks know that people will be forced to sell that property at a big loss if they go bankrupt using their credit cards. With this in mind, the offer of extended credit is given to the mortgagor.
There is a move here to force banks to reveal the source of their income, while the opposition wants a royal commission into banking practices. With the media’s emphasis on the continued links between credit cards and bankruptcy, this is long overdue.
The best way to avoid the trap is to tear up the cards and do nothing with them. Deals are only like this when there is a real saving in the purchase. If money is managed properly, buying things with money will quickly become a priority.
#Credit #Cards #Bankruptcy