Financially Ruined by Credit Cards

You will know when your credit is bad when you go for a loan and you are turned down flat. You may want to buy a car or a home and your credit is so bad the lending institution will not trust you to pay them back. That is a hard place to be in. Most people don't just wake up one morning to discover they have bad credit. It usually takes time to build this negative reputation. However, it can happen. A friend of mine is a really reliable person, yet his credit was smashed almost overnight. He bought a new car, and before the first payment was made he lost his job because the plant he worked in shut down. He couldn't find another job to make all of his ends meet. He used his credit cards to see him through till he landed another job. He may never be able to repair his credit.

You know you are heading into dangerous territory when you discover you cannot pay your bills, or you can't pay them on time. If you are always robbing Peter to pay Paul, you are in financial trouble. Another friend of mine got one of those offers from a credit card company. It said something to the effect that he was pre-selected to receive this credit card because his credit was in bad shape. Supposedly, if he ordered this Visa card through this credit card company, and paid his monthly bill on time every month he would repair his credit. Right! The first time he was late or went over the allowed purchase amount he was bombarded with charges. It became a cycle. His $500 Visa card became a debt of over $3,000 that he is in collection for. So now his credit is worse than when he ordered the card. He got enticed by another card. This was a MasterCard, by a different company. It was a card with a $300 limit, but that was only after he paid all the fees that came with the card, which was $150, which he didn't understand. He made his purchases nearing the card's limit of $300 and was stuck with huge penalties to pay.