Credit Card as a weapon ?

Credit Card is a double edged sword we are using in our capitalistic world today.

It allows you to buy now and pay later.

"HUH? what you talking"

what i mean is, exchanging future income for today's enjoyment, oops, i mean necessities.

I often joked," Wah you got 4 credit cards! that puts you into the top 10% earners in singapore because you would have access to $20,000 funds a month!"

The truth is that Credit gives you an immediate purchasing power even beyond your means but it doesn't increase your income.

Credit card is like the 2nd best thing that a human mind had ever invented, 1st being life insurance of course.

A person who understand the pros and cons of it often get the most out of it, but the same truth apply to people who doesn't understand credit.
It's that, it will get the most out of you.

There's a quote by THE JOYCE BROTHERS "Credit buying is much like being drunk. The buzz happens immediately gives you a lift... The hangover comes the day after."

The danger zone:
1. what girls call "shopping therapy" i mean for those who spend out of their means to service the bills.

2. Buying with minimum down payment, i heard some boos, some people say what about the opportunity cost involves? Ya I'm talking about minimum or even zero down payment.

That is provided the "opportunity" which you are talking about can hedge against the credit interests and make you some money.

3. Cash advances? heard of that, means when your bank no money, you can take your credit card and withdraw cash. check out the interests rate man !

4. Borrowing money, im not talking about emergencies.

5. Using your emergency funds to pay for daily expenses.

6. when you hit your credit limits. That's a classic.

However, with proper financial planning, you can avoid such agonies.
*Financial planning doesnt mean buying life plans, endowment or hospital plan although this might be part of it. Some people hear the word financial planning, "what you want to sell me ?"

1. Learn to pay your bills by charging to your debit card/NETS IT! But nowadays, different cards got different benefits and discounts at different places! so tempting. so make sure you don't choke up bad debts.

2. Spend your money wisely according to your cashflow plan.

3. Reduce your debts as soon as possible.

4. Do not borrow or take loans to pay off existing loans/debts. work harder instead.

5. Set aside a sum of money every month when you received your pay check on top of your existing liabilities, insurances, monthly savings and emergency funds.

I hope it helps !