by Sylviane Nuccio

Created on: August 16, 2008

Credit cards have become a well-established feature of modern
society. There are over 25,000 different credit cards available
today in the United States alone. Retail stores and airline
companies issue their own cards.

The plastic money industry has
also grown in Europe. The total number of credit cards
worldwide is well over a billion.

Why such abundance in plastic

money, who benefits from it, and what are some of the dangers
that credit card holders are facing?

The credit card market has
flourished in past years due to different reasons. Some of these
reasons are heavy advertising about new gadgets updating each
and every year, the automobile industry telling the public that
they can buy a new car with very low to no down payment. There
are also the furniture and retail stores that are inciting you
to use credit cards.

Today you can refurnish your whole house
on credit from your fancy coffee machine to your expensive
entertainment center. Retail stores like Sears, Macy's Hudson
Belk, J C Penny and the like also have their own credit cards
with interests up to over 25%.

The plastic world is so prominent
that high school and college students are finding themselves in
debts before they actually earn a stable living.

Who benefits
from such abundance in plastic money? Banks and credit-card
companies earn substantial profits from your credit card, not
only from membership fees, late fees, over-limit fees, but also
from the high interests from the money owed to them.

Of course
creditors cannot profit from finance charges unless credit-card
holders incur sizable debts. To please them, in the United
States alone about 75 percent of card holders have ongoing
outstanding balances on their account for which they pay
exorbitant interests each month. The average American
credit-card debtor owes over $2000 on his monthly
balance.

Beware of the dangers of plastic money.
One of the
dangers of the small pieces of plastic is credit card fraud,
costing hundreds of millions of dollars each and every year, and
this reflects on your interest rates.

The other obvious danger
is the hardship of falling into deep debts. The problem starts
when people spend money they do not have on their credit cards.
This fact is so real that one of the major reasons why retail
stores will try to sell you their credit cards is because the
customer who owns the store credit card will spend 30% more than
the customer who doesn't, regardless of the fact that they can
afford it or not.

For many, plastic money has been an economic
downfall that could be ended only by bankruptcy. Some people
who have found it difficult to control their use of credit cards
have chosen to get rid of them all together; on the other hand
many people understand that a credit card is meant to be used
wisely; spending only the money they will be able to pay
back.

Every time you use your credit card, remember that you are
borrowing money that you will have to pay back sooner or later.
The later you will pay the more it will cost you.

Learn more about this author, Sylviane Nuccio.
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