Would You Put a Car on Your Credit Card?
Credit cards are handy, but buying big-ticket items using them can lead to monstrous interest charges over time. Yet, this doesn’t keep people from doing just that.
Case in point: one in five Millennials say they would buy a car with a credit card, according to survey results from credit scoring company FICO.
Now, many people cite today’s commonly-available zero-interest offers on credit cards and say, “I can use my card and never pay a penny in interest.”
Sure you can, but the credit card companies are betting against you. That’s their whole strategy with these offers.
They know that life gets in the way of the best laid plans, and that most people will fail to pay off balances before the introductory zero-interest term runs out, and the high interest kicks in.
Credit card companies are geniuses at figuring out the psychology of people and their money. While there’s a certain small percent of the population that can game their system, the vast majority of people tend to bite of more than they can chew.
This is the business model of credit cards companies, and it’s a very successful one.
So, be honest with yourself. Are you one of those few people who manage money so well that they can beat the credit card companies at their own game? Or are you like most of us: well-intentioned, but prone to overestimating your money management skills?
Do yourself a favor and see your credit union before you do something crazy like maxing out your credit cards to buy a car. Step away from that cliff! Chances are, your CU can help you come up with a plan to finance that car you need in a way that keeps you from getting in over your head.
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