Creditors, Lenders, & Credit Cards

The most common or major misconception people make about credit is:

If the creditor or lender gives me the credit I must be able to afford it otherwise, they wouldn't have given it to me. 

What we need to do instead is question whether or not we really even want the increased amount of credit. With that increase in credit comes additional responsibility  to manage that new credit. If you do not have the willpower to keep your spending within the old levels and not exceed the new level you should call the credit card company and have the limit lowered again.

What if your credit card is lost or stolen?

Another consideration is to think about what would happen if you lost or someone stole your credit card. Do you really want them to have the additional spending room. When theives charge on our cards even though we may not be held personally liable by the credit card company we all pay for those purchases in the end with higher interest rates on our cards, annual fees, higher costs of credit for everyone is the end result.

Credit Card Companies raise individual credit card limits all the time: 

Many of us don't even question the increased credit limits. Actually, we think we've been given an award or a gift of some kind because we now have a higher limit on our credit card.

Credit Card Companies are not rewarding you for doing business with them as some of us think they are: 

Credit card companies are in business to make money and they make money when you can't make your credit card payments. They  make a lot of money when you can only afford to make your minimum payments. Credit card companies charge interest rates anywhere from 9.9% to upwards of 28%. If you would like to do a comparison of the different types of credit cards available and the interest rates associated with them connect to the following link for the Financial Consumer Agency of Canada.

www.fcac-acfc.gc.ca  Financial Consumer Agency of Canada provides information about credit cards, banking services, and Canada Deposit Insurance Corporation. This website does a great job of comparing many of the different credit products available. The interest rates, grace periods, features of the product are compared so that you can make an informed decision as to which is the best product for you.

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