Credit Cards and Family Budget

Normally we use credit cards for a variety of good reasons, like convenience, business expenses, online commerce, instant accountability, unexpected bargains or expenses, medical and or other emergencies.

There are however, also very definite situations where plunging yourself deeper into debt is not a good idea at all:

- An expensive item you know you cannot afford (indulgence shopping). If you do not have the cash funds to purchase it, charging it is not going to make it easier for you to pay it! By putting it on plastic you just racked up the price and interest charges. Your budget will not thank you later for this one. Bad decisions often lead us down the wrong path. You will be left facing paying for this choice for a couple of years down the road still.

- Tele shopping or infomercials for gadgets and widgets.

- When grocery shopping, pay cash rather than plastic, or you will most likely overspend.

- Meals, drinks, nights out and other entertainment charges are all like the miscellaneous category in a budget. The balance and dues will just keep on piling up, if it is not tracked and monitored closely

- If you are truly going to be budget-minded and money conscious while trying to get out of debt, consolidating or in debt-repair avoid the plastic!

- Check the interest rates on your card, consolidate accounts, go through the exercise of balance transfers et al. and seek the advise of a professional to assist and advise you, on how best to approach credit of any sort while on the mend to financial freedom, reputation, repair and recovery.

- For family budgeting purposes, credit cards are for EMERGENCIES ONLY and should not be used to pay for bills or luxury items. Carrying a high balance, missing a payment, paying less than the minimum or other faux pas, might negatively affect your credit rating and undermine all the other good work you were doing in your budgeting process.

- Watch out for steeper late charges, higher rates, annual service fees, interest rates and charges, and cash advances.

- Using your credit card at an ATM for a cash advance can sometimes not be convenient, as the rate and cash advance fees can total as much as 24% or higher. This is even more than loan sharks or other payday like loan providers.

- Do not use credit cards for any of the following reasons: unbudgeted expenses you cannot pay for; having no cash savings to help you with unexpected expenses, consuming more than you can afford or impulse shopping.