Understanding Money Management – A Key to Success

What is there to understand you say? Well let’s start with some basis principles of money management as it relates to credit cards. While most understand that the use of a credit card institution’s money is not free, the concept of finance charges, late fees and annual fees are not fully understood. How many times have you heard a person say, my intentions were to always pay the full amount within the grace period of usually 30 days to not incur any finance charges and fees. While great in principle, it does not always play out in practice. There are many reasons for this with one of the significant ones being there will always be a time when that payment cycle shows up and making the minimum payment looks very attractive. The credit card companies put a lot of thought into this and that is why they make it very easy for you not to pay the full amount due. So once you start making the minimum payment you are off your strategy and what happens next, the balance continues to grow and you are not making a dent in it by paying the minimum due but the credit card company is smiling. The next thing that happens is you miss a few payments and there are late fees and if you miss too many they will increase the finance charge and possible suspend your ability to use the card. At this point who is in control of your money?