Perhaps one of the profound ways of clearing the mounting hatred around credit cards is the acknowledgment that not everyone needs a credit card. Like any other tool, a credit card can get in the wrong hands and prove to be financially detrimental. People who lack some qualities such as self-control should avoid credit cards. In addition, people whose financial situation is already ruined and are striving to repair it should also avoid credit cards.
In order to reap the many benefits of credit cards and avoid the devastating implications of credit mismanagement, it is necessary for one to be ready to exercise some of the basic values such as honesty and self -control. It is only when these values are not effectively practiced that credit card use can turn out to be the nightmare of huge financial debts explored in Habbenhof’s You Tube video “In Debt we Trust: How Money and Credit Control Your Life.”
Overspending that can lead one into unimaginable financial debts. However, in the You Tube video, some of the people accusing credit cards of their current financial problems allege to have lied about their incomes to get higher credit limits. The fact that they even considered lying explains that it was their dishonesty that led to their problems. An honest card user would only require a limit that is within his or her means and will not have the problem of dealing with debts that exceed their financial capabilities. It is the values and skills of the credit card handler that determines his or her future financial situation.
Why Credit Cards are not Poison
Credit cards offer some of the most lucrative financial benefits to their users and are definitely not any sort of poison. Compared to other available existing options such as debit cards and cash, credit cards provide unmatched consumer protection to their users. The ability to use the bank’s money in purchasing goods creates a buffer between the consumer’s money and the merchant. As such, any problems that may arise can be handled by the credit card company on behalf of the consumer.
In the case of debit cards and cash, this kind of protection does not exist and therefore the consumer is exposed to numerous risks such as fraud. For instance, unauthorized use of the card does not lead to liability in the part of the consumer as it is often the case with debit cards. Making transactions using credit cards accords more power to the user in case a problem arises in the future as opposed to other options such as debit and cash.
Making huge purchases using credit cards is another way that credit cards prove to be more beneficial to consumers than any other available means. Credit card transactions often extend the warranties of products past the time stipulated in the manufacturer’s warranty. Other credit cards offer an extension to the purchase protection in case of damages. The bank takes care of the extended protection and warranties and is responsible of making any payments. Price protection is the other unique benefit that credit card users get. For instance, in instances where the price reduces after the purchase has been made, the consumer benefits by getting a reduction or a refund equal to the extra costs.
Arguing that credit cards are responsible for the decline in personal savings is utterly wrong. Credit cards offer the consumer a way of making an analysis of their spending at the end of the month so as to be able to point out possible areas where savings can be made. The process depends on the user’s ability to plan and follow budgets strictly. Self- discipline is essential for this to work out. Unfortunately, majority of the people who cry foul lack these essential values that must accompany effective credit card use.
Making timely payments of the due charges also comes with many rewards such as airline miles, cash-back, among many others. In addition, many credit card companies offer 0% introductory interest rates which last for a certain period. These added benefits encourage credit card users to make prompt repayments as they are not accessible to anyone who defaults the payments. The benefit of time-shifting using the credit card also offers consumers the benefit of redirecting their current financial resources to other responsibilities. Just like any other loan, the credit card user should be committed to repaying this favor with some interest.
By not considering the many advantages offered by credit cards and instead focusing on the negative issues that can be avoided amounts to being biased. Credit cards should not be made liable for the financial problems experienced by the users, but the blame should fall squarely on the consumers for the choices they make. The benefits of some personal values and skills in financial management are obvious and instead of accusing the financial tools, these values should be taught in colleges to make people more responsible in their financial management. It is only after the useful values have been instilled to credit cards users that the benefits of these cards can be experienced by many.
Works Cited
Habbenhof, Gerrit. “In Debt We Trust: How Money and Credit Control your Life.” Online video clip. You Tube. 2013. Web.