Use of Credit Cards :: essays research papers

The use of credit cards is much more treacherous than use of checks or cash. Paying with cash is real easy for knowing howmuch money is available and how much can be spent makes it in truth hard to get into debt. When paying with a check the processis a bit trickier the exact balance has to be kept on the account at all time. Knowing what this balance is and continuouslyreplenishing it can be quite hard. Nevertheless, even with a check consumers can not get into a draw of trouble. If more money is spent then the shopper has on the current account, the last written check will be rejected and account will be suspended until the balance is paid off. With credit cards however, e precise year more and more people get into debt.According to American Bankers Association (ABA), Americans owe more then $387 billion on their credit cards. This frighteningnumber, averaging about $3,900 per family, is just as bad for the economy as it is for the consumers. In September of 1995, for example, The AT&T Universal card charged $15 per month for late fee to people who paid their bills just one day afterward the due date. Visa, on the other hand, was charging the penalty feesfor as little as a dollar over the limit, plus an interest of up to 24.9 percent per year. In the second quarter of 1995, overdue payments as a percentage of outstanding balance hit 3.267 percent. That is the highest mark since recession of 1991. "The picture is, some consumers are very,very deeply in debt," says Charles McMillion, chief economist with MBG Information Services. A swipe of the card has becomeso natural that many consumers do not construe how much they have charged, nor that it will take them forever to pay that debt off. Seventy percent of respondents to a recent ABA survey said that it would take them at to the lowest degree two months to pay off their holiday expenses. Unfortunately, there are more ways to use a credit card than ever before, making it very hard for consumer s to refrain from spending a lot of money. Shopper can charge groceries, teeth cleanings, and on-line servicesto their credit cards. Introduction of rebate cards which furnish users credit towards new vehicles, frequent-flyer miles,