Why Am I Not A Fan Of Cutting Up Credit Cards?

20,000 dollars. I was just approved for a credit line of 20,000 dollars the other day. Why am I sharing this information with you? Because bad spending patterns, and stupid decisions with credit cards are the reason that most people are in debt, not the credit cards themselves.

Sure, it's easy to blame the credit card company for your faults. If they hadn't offered me this, if I hadn't transferred that. Enough already! Part of being a responsible adult is being able to make smart decisions regarding your money.

​Let me be really clear. Credit cards are a big responsibility. When they are used recklessly, they will destroy your financial future and cause you some major financing problems later in life. You will struggle to buy a house or car if your credit card debt is out of control. The more you know about your personal credit score, and the more educated you are about your credit in general, the more likely you will use your credit cards wisely.

So what am I going to do with this new, massive credit line? Absolutely nothing right now. But I now have another source of spending power, in addition to my cash savings that I can utilize if a solid business opportunity shows up somewhere. I could literally buy a couple cars and flip them to another seller with that kind of credit line. You never know what opportunities could show up. I have an auction next weekend already scheduled, and another amazing opportunity was handed to me last night by a friend as well.

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Do you carry credit card debt currently?

Look for some amazing opportunities right now to transfer your balance. Normally, a 0% APR is provided to you only during an introductory period by the credit card issuer. After that promotional time lapses, any balance left on the card will accrue interest until the entire debt is paid off. You could then explore transferring the balance to another credit card.

The average credit card has an annual percentage rate charge from as low as 6 percent to as much as 30% for higher risk clients. Credit cards with 0% annual percentage rates are always the most popular option in order to get people to sign up for a new card. However, one should clearly remember that the 0% annual percentage rate does not last forever. In most cases, this introductory offer only lasts for 6-12 months.

Credit cards with 0% APR work best for people who transfer their current balances on other credit cards to the new credit card. Through debt consolidation, a 0% interest rate works for the borrower by cutting back monthly interest expense payments. You are paying 100% principle. The lower interest rate can also save time for the borrower by making only one payment per month to one company. The best approach would be to try to pay the balance by the end of the introductory period (or transfer any remaining balance to another 0% offer if it is a large amount).

Reports show that most of the charges that consumers pay each month are focused on interest rate charges alone. The average interest rate that the credit card owner pays on is 18.9%. Keep in mind that any late charges can also be charged if your payment is received by the credit card company even one day late. This late fee can increase your expenses and your APR as well.

But before you grab that dazzling 0% APR offer on just any given credit card, try to consider some important information first. Read the fine print!

Indeed, 0% APR credit cards can give you a lot more advantages than paying 18.9% each year. Just remember to read the fine print. Many credit card owners are blindsided by transfer fees (2-3% of amount transferred) and/or their new interest rate after the 0% APR has expired. The only way to compare credit card offers is to read every part of the offer, and understand it thoroughly. Remember you are signing a binding contract.