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Credit cards can help or harm your financial situation

There are several things to think about when you are considering a credit card. One thing is that you will have to repay what you charge. Another thing is that credit card companies make their money off of fees and interest. While fees and interest aren't likely to be much if you use your credit card responsibly, they can add a hefty amount to purchases if something happens and you can't pay the card off in full each month or within a reasonable time.

When you are thinking about using a credit card to make a purchase, take a few minutes to classify the transaction. Is it a need or is it a want? The answer to this question will help you determine if you should consider using your card.

Another thing to ask yourself is how soon you can pay the balance off. From there, think about how much you will pay in interest if you take that long. This amount might actually negate any savings you could have if you made the purchase right now. If the purchase is a want and the interest will cost you more than the current price, you might do better with saving cash for a few months to make the purchase.

If you have already made charges on your credit card, you might start to realize that it is much easier to charge items to the card than it is to repay the credit. You might even come to the realization that you simply can't keep up with payments. At this point, your focus has to be determining how to handle the credit card balances. One option might be bankruptcy, so be sure to consider it carefully if you need a fresh financial start.

Source: CreditCards.com, "8 things you must know about credit card debt," accessed March 22, 2017

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