A credit card can be a great convenience. Further, it is easy to acquire. However, if it is not used prudently, the card can become one's greatest financial adversary. In today's society, it is easy and common to charge one's purchases to an account or credit card. However, paying for the purchases when the monthly bill arrives can be more difficult. By simply reading the newspaper, we become aware that the availability of easy credit has given rise to serious problems. When the newspapers regularly carry articles that report bankruptcies, it is evident that consumer debt has become a problem for today's society.
Overextending oneself, as Tammy has done several times, is one way of misusing credit. When Tammy sees something that she feels she must have, she will purchase it without further thought. For example, on one occasion, she purchased a new Nintendo system for her son, although he already owned one.
During a recent Christmas season, Tammy badly overspent on gifts. She accomplished this by purchasing as gifts for her children everything that they had wanted. She did not forget her husband. Tammy purchased for him the $200.00 St. Louis Blues jacket that he had wanted, in addition to a $300.00 diamond ring. Tammy is aware, when she makes such purchases, that she will not have the money with which to pay for them when the monthly credit card statement arrives. Nevertheless, she does not appear to consider that she will become increasingly overextended financially by not paying her credit card purchases promptly. Her indebtedness grows. However, when she purchases a new vehicle, she is surprised to learn that she must pay an interest rate interest for her car loan that is almost six percent higher than she had expected.
Buying unaffordable items is not unusual for...