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Avoiding debt trap in 2010

An array of credit and ATM cards
An array of credit and ATM cards
Photo: RGA

Millions of consumers across the nation may take advantage of the surge in retail chains' various offers and deals, particularly on electronics items, which makes them more attractive to bargain-hunters from all fronts.

At the Carson Festival Mall, for instance, almost all the big retailers are operating full blast as the year-end is coming to a close. They might have thought it a long time to dispose of their leftover inventories last year so that they can replenish them with new stocks for the coming year. And the only best way to do it is to cut the prices of these stuffs between 20 to 60 percent. These make them more attractive for hungry customers whose appetite for buying bargain stuffs in has become inevitable in the midst of the economic crunch.

With most people now finding it hard to let go of their hard-earned cash in an instant, they prefer to use the plastic money if only to stretch their budget before and after the holiday season. But beware. The temptation of overspending is greater when using plastic money. However, financial experts have suggested at least three ways to avoid potential credit card debts:

1) Always compare rates and fees before applying for a credit card. You must remember that different banks have different APRs, fees and penalties.
2) If possible, carry only one or two credit cards with you to avoid overspending and limit usage.
3) Don't ever try to negate on your credit card payments. As much as possible, try to pay in full everytime your latest bill comes.

With more pre-approved offers from major credit card companies, most people just can handle the situation and immediately bite the series of offers without even reading the terms and conditions that go with them when they signed the application. That's only the first part of it and the second part is most painful when credit cardholders go berserk in their spending sprees. Most probably, wayward spending on unnecessary stuffs could hurt a credit cardholder's credit rating, especially if he exceeds his credit limits. Higher penalties could be slapped against him, too, on top of the higher APRs imposed by some credit card companies.

And better still, don't lose your credit card. It is likely that other people who got it might use for sinister purposes.