Deadbeat. The term is referenced in the dictionary as “One who tries to evade paying debts”. Even Black’s Law Dictionary defines the term as “A person who does not pay debts or financial obligations”. So is may surprise you to learn that the credit card companies use this term to describe people who actually pay their balances in full. Every month. Month after month.
This of course is not official, just behind the scenes. But for those of you who pay your full credit card balances in full every month, the credit card companies don’t really like you. The reason of course is that they don’t make much money from you.
Sure, they make some money. If you pay your balances in full, the bank’s profits from “you” are really stripped away from the retailer you buy goods and services from. Which means this money is stripped out of the economy. So if you really want to help the economy, use your debt card, or better still, use cash.
Credit cards are just extensions of the banks. The real profit for the bank is the interest you pay when you don’t pay your balance in full. To the bank, the perfect credit card customer is the cardholder who pays just their minimum each and every month. Most of that payment is interest. This is “Free Money” to them. And we have all heard of the outrageous interest rates being charged from credit cards these days.
When you pay interest to the bank, it reduces your spending power. This of course reduces the amount of money you can and will spend. Which makes the economy suffer. But it’s a windfall for the bank.
So do the economy, and yourself, a favor. Become a “deadbeat” in the eyes of the credit card company. Pay your balances in full. At least stop using that plastic card until you can rid yourself of these excessive balances.
If you cannot pay your balances, then it’s then time to look for a solution. There are many solutions out there. Settlement programs, debt management, debt elimination, consolidation, refinancing, and of course bankruptcy. Not one solution is best for everybody. Each individual must weigh the pros and cons for each solution to their own situation.
Jim Vrana of The True Debt Advisor (http://www.TrueDebtAdvisor.com) states, “People who find themselves in a cycle of debt need to find a solution, and start now. The sooner you take action, the sooner you will be debt free. The bank is not going to take action for you. At least, not any action that is in your best interest.”
The hardest part may be to recognize that there is a problem. A person may carry balances on many cards, each with a seemingly manageable balance. Some people are shocked when they actually add up those balances to find their total credit card debt. This is when it hits home that help is needed.
There is help out there, but you must go find it. Your financial advisor is a good place to start. But educate yourself. Don’t just accept the solution of one individual, even if that person is a trusted financial “expert”. Nobody is an expert on your needs; except yourself.
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