By Irene Mori

In these difficult financial times when many people are suffering due to the bad economy of recent years, it may be easy to fall victim to the lure of credit cards. Although credit cards are not offered as freely in the mail as they used to be, stores are still making credit card offers to their customers when a purchase is made.

There are some good reasons to use credit cards. They provide a record of purchases. It is obviously advisable to have a credit line of some sort available in case of emergencies. Credit cards should be used wisely without incurring insurmountable debt.

Many banks or other companies today offer points or cash back for purchases. These incentives can be great rewards for using credit. People are able to pay for vacations or acquire useful items through the rewards programs of credit card companies.

It is often tempting to accept a credit card at a retail store when the sales person asks the customer if they would like to save 10% or 20% on the purchase they just made by signing up for a store credit card. The customer should realize that the sales person will get credit for obtaining a credit customer, and it may not be advantageous to acquire the card which could take down the credit score a little just for signing up.

Sarah needed a phone charger while traveling. Her husband went to Radio Shack to buy a charger and was suckered into signing up for their store credit card. They almost never shopped at that store, but the enticements of the sales person sounded good so he accepted the offer. Sarah then found that she did not need the charger because someone was able to give her one which worked. They took the new, unopened charger back to the store to return it. The sales person said they did not know how it was paid for and put the money back on a gift card. In the meantime, Radio Shack sent a bill. The gift card was sent to Radio Shack for payment of the bill. Another bill was received which included a $17 late charge. After several phone calls where Sarah was told that there was no way they could show credit for a Radio Shack gift card as payment, they finally relented that the bill had indeed been paid. However, the $17 late charge was still owed which Mary paid along with cancellation of the new credit card account. This undoubtedly had a bad effect on the credit score because of the initial opening, the late charge, and the closing of the account. Although it may have been a costly mistake, it seemed worth it to be rid of the card which would likely never be used anyway.

Everyone has been advised to steer clear of credit card debt. This is good advice, and one way to follow it is by saying no to the sales people who offer instant credit.



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