How to live with a credit card in the post-depression era

Whilst it is easy to gain the government and the banks for the financial quagmire that the UK succeeded in sinking itself in, the public also have to be levied a portion of the blame. As a leading financial analyst proudly proclaims, it was the shopping centres and the credit cards that did it as much as anything else. The banks and credit card seemed driven to provide unlimited credit, and the government turned their backs and pretended that it wasn’t happening. And the British public at large had a great time running up debts on their credit cards that they had no chance. And in some cases, no intention of repaying.

There are people who will be saddled with debts for at least the next decade, and will be paying fairly exorbitant interest on those debts as a lesson on how to use credit cards in the era which is hopefully not too far away. The end of the first great economic turn down of the 21st century.

Let’s face it. Having a credit card at your disposal is very convenient. And make no mistake about it, the majority of people whose lives became very difficult through misuse of the powers and responsibilities that being issued with a credit card entails, will continue to use them in the future.

However the rules of the game will be different. Anyone who has found themselves under an immense burden of debt would never have enjoyed the experience, and will never want to repeat it. And even if they did, the banks will have imposed such a strict system of checks and balances that the chances that it will happen will be miniscule. Credit cards were meant to replace cash and cheques, and when viewed in that light, they do an excellent job. A responsible person with a credit card should only use that card to cover around 40% of their monthly financial outlay, and should stagger payments amounting to no more than a quarter of their monthly credit card bill.

These are very simple rules, but if adhered to, will prevent a repeat of the most uncomfortable experiences that too many people have gone through in the last couple of year.

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Tags: Bank, Banking, Budget, Credit, Credit Crunch, UK Credit Cards