The primary benefit of the credit card for the customer is its convenience.
In comparison with cash checks and debit cards, credit cards seem to attract the consumers greatly.
It is extremely convenient for those who handle large scale payments since it prevents the need to carry brief cases full of money with a circle of security guards.
In other words, it provides more fraud protection.
Additionally, the customers seem to be attracted by the bonus points and other types of rewards it offers.
While the plus points of credit cards can be listed above, there is a dark side too.
Want to know about it? Well, keep on reading.
The most popular words attached with credit cards are the 'credit history'.
Were you aware that it has an immense influence on your credit reputation? If you were not, spare some time to read a little more.
The manner in which the consumers pay their monthly payments has a huge impact on their credit reports.
Each and every transaction is recorded in this report and stocked in the credit bureau.
The financial institution seeks information about the consumers from the credit bureau, to determine his 'credit worthiness'.
In simple terms to determine whether the person is eligible to facilitate with a loan and to ensure that their credit can be gained back.
It is obvious that certain practices should be avoided, if you want to maintain a clean 'credit reputation'.
A special care is needed when you try to eliminate your credit card debt.
For example, if you choose 'bankruptcy' as your first choice, it is likely that it immensely damages your credit report.
Why is it dangerous? Once a person files a bankruptcy, your credit report will be polluted.
It prevents you from applying for a bank loan or any financial support in future.
Besides, you will be labeled as a 'cheater'.
It will harm your reputation as well as your dignity.
If bankruptcy should be avoided, what can be the best method? The best bankruptcy alternative is self money management.
Trying things which are affordable will keep you out of troubles.
You should be smart to differentiate between things you need and things you like.
Other than that, opting for a debt settlement program too can be considered wiser than declaring personal bankruptcy.
With the effects of economic recession, creditors understand that bankruptcy is an option for debtors with overwhelming debts.
Since the incentive of the creditor is to recover a proportion of money, they like to negotiate in most cases.
So make use of this opportunity and set yourselves free from debts.