With so many attractive credit deals out there these days, it can be exceedingly hard resisting the temptation to load yourself up with more plastic. Offers like 0% interest for six months, frequent flyer miles, cash rebates, shopping discounts and even charity donations are offered to tempt you into taking a particular credit card.
This is all good news for financially savvy consumers. However, for those of us who operate up to 50 credit cards this could all add up to one hell of a financial headache.
Some of us are saying enough is enough and getting out while they can.
Susan Morris of Pittsburgh Tribune Review is someone doing just that and here’s why:
“The reason is simple: having multiple cards makes it too easy to get into financial trouble.”
Consider the following:
• Each card has its own credit cycle. If you have several cards to pay off each month, it’s easy to forget the different due dates.
• There is a huge spread in the different cards’ finance charges. It makes sense to limit your card use to the one(s) with the lowest fees.
• Rather than improving your credit score, having multiple cards can actually hurt your credit status. Lenders assume, correctly or not, that holding multiple credit cards increase the risk of your going into debt.
• You don’t impress anyone with the number of cards you have. Credit reporting agencies are primarily interested in how promptly you pay your bills, not in the number of credit cards in your wallet.
Posted by Peter Brady on Mon 20th November 2006 at 10:25 AM, Filed in Credit News
Recent figures from Australia’s Financial Services Ombudsman (BFSO) indicate that complaints about credit cards have increased in the past 12 months, according to new figures. This seems to echo a global discontent with credit card companies and some of their sharper practices.
Ombudsman Colin Neave released the 2005-06 annual report in Melbourne and said that “for the fifth consecutive year credit card disputes have dominated the number of complaints to his office.”
They accounted for 37.5 per cent of complaints about banking products.
Mr Neave said “33,559 telephone calls were made by consumers to BFSO case officers during the past financial year an increase of more than three per cent on the previous reporting year.”
Consistent with many other countries there was also an “increase in consumers experiencing financial over-commitment and hardship because they had been signed to a product, such as a credit card, which they could not afford to make the repayments on.”
(Via The Age)
