Credit Cards’ Ugly History

by Tom Tousignant

in Blog, Financial Safety

Credit Card interest can eat your financial lunch, if you let it.  The average interest rate on credit cards over 12%, and there is almost $1 Trillion in outstanding credit card balances.
Some quick math yields over $120 Billion spent annually on credit card interest.  Since Interest on Credit Cards are not tax deductible, Americans have to earn $180 Billion each year just to pay off credit cards.
It’s OK to use credit cards, but they have to be paid off in full each month.  Carrying balances, paying late charges or over-limit fees make credit cards even more of a financial cancer for families in America.
I used to pay my balances in full each month and try to take advantage of the 20 day grace period on the credit card billing cycle. Since money market rates are so low, and checking accounts pay next to zero, I find it’s easier now to pay off both my cards on each payday.  I get paid bi-weekly, so every other Friday, I simply login to my credit card accounts and bring the balances to $0.  This keeps the balances low, which helps my credit score, and ensures I am never a day late on the billing cycle.

History of Credit Card Debt

History of Credit Card Debt

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