We talked about how picking the right credit card to go with is very important. There were many people like Kyle and Nick who had to work out their financing. Broke Bill led them astray, but Finance Frank put them on the right track to success. Our class worked to find out which offers were the best for them. We noticed that the APR (annual percentage rate) was often 0% at first, but the percentage could jump to over 20% within 15 months. The class found that the perks of a credit card were sometimes there to mask a more taxing set of fees for that particular card. We learned which credit cards offered the most legitimate deals. If you aren't careful with keeping up with payments, then you can end up spending way more money on interest than the original purchase was worth. A person often chooses to use a credit card instead of cash because of the convenience, but this means the person will be accumulating interest on items that they could have easily purchased in cash. This person is using the credit card to buy items that they will need to spend even more money on later.
The fact that we learned about credit cards has already proved value to me. I use my parents' credit card and I often find myself thinking that it is so much easier to just use it for purchases so that I don't need to handle any cash. I now know that this could be a very dangerous habit. I have no idea how my parents pay all their credit card bills, but they do and I now have a deeper appreciation for them. I think that the more we learn about Personal Finance, the more and more valuable information we accumulate. I know that I will need to be careful about making all my payments on time so that I have good credit history and that I need be very selective when choosing which credit vehicle I want to use.
Works Cited
"Credit Card: A Friend in Need or A Foe Indeed?" RinggitPlus. Web. 15 May 2014.