Your credit card is sucking your financial blood

Your credit card is sucking your financial blood directly from the jugular on your neck. The credit card companies are laughing all the way to the bank with cold hard cash in their hands.

Why Credit Cards Can Be Bad for Your Financial Health

Interest rates are pure profit for the credit card companies. That's why they do everything they can to make them as high as possible. All across the country consumers are stuck with credit cards with interest rates as high as the law allows.

They lure you in with low or no interest rate introductory periods. They convince you to create a very high balance very quickly with easy to use balance transfer checks. In the small print, on the back of the offer letter, is where they spring their trap. Miss a payment, even by a couple of days, and your interest rate shoots through the roof. If you receive a cash advance from the card, you also receive a different interest rate. The interest rate on balance transfers is usually very high. The highest interest rate on the card is usually the last one that your payments are applied to. In this way, the bank gets to collect the most amount of interest for the longest period of time.

High credit card balances are choking the financial well-being of Americans. The average credit card debt is more than $9,000 (Americans on average have $9,312 in credit card debt — according to cardweb.com), and many politicians, pundits and journalists say it's a sure sign of impending economic collapse. Here are a few things you can do to ensure your bank account doesn't get too lonely.

• Don't sign up for too many credit cards (if you haven't already)! Get a few of them, to maintain good credit scores, and throw the rest of the offers in the trash can - no matter how enticing.
  
• Spend wisely on the cards that you do have. If you can pay off the balance every month, that's the way to go.
  
• Educate your children about credit cards before they go to college. How many times have you heard this story? A new college student is wandering through the student center when they learn they can get a free t-shirt if they just fill out this application. The next week a shiny new credit card arrives in the mail. That night, the pizza delivery goes on it. The next week, the new pair of jeans go on it. The minimum payment on the card the next month isn't that high, so the student keeps spending until it's maxed out. Student gets another credit card and repeats. You know how the story goes from there - student is saddled with credit card debt for another 15 years! Unless, of course, Mom and Dad bail her out first. Don't let this happen to your kids just because you didn't teach them about their financial health!
  
• To pay off credit cards, use a strategy. Pay the minimum on all credit cards except one. Apply the most money you can to that one until it's paid off, then take that entire amount and apply it toward the next one. This method is much quicker than splitting the total amount and putting it toward all the cards equally.
  
• Beware of refinancing your house to pay off credit cards. Beware of consolidating credit cards into a separate loan. It's a recipe for disaster when you pay off your credit cards with another loan because it's tempting to put money right back on the empty balances. Then, you're left with a big consolidated loan payment, plus more credit card payments.
  

Your banker drives a Mercedes Benz, and you pay for it every time you put something on your credit card that you can't afford to pay off the same month. You're paying for it every month. You're paying for it year after year. Be smart with your money, and make that bum get HIS money somewhere else!