Credit cards can be very destructive to your finances, however if used correctly, credit cards can be beneficial. Here I talk about the good, the bad and the ugly when it comes to credit cards.

Video Transcript Hello, this is Darrell Castle. I’m an experienced <a href="https://darrellcastle.com/blog/" title="Memphis bankruptcy attorneys" target="_blank">Memphis bankruptcy attorney</a> licensed to practice law in the state of Tennessee and on this video, I’m talking to you about credit cards – the good part of credit cards and the bad part. And in my mind folks, this is just the way I look at it, there aren’t many good things to say about them. They’re mostly bad. They’re destructive. They’re destructive of your financial life. I say that to you because they’re like a siren calling to you from the rocky shore. Your ship is heading to that shore and sometimes it seems like it’s irreversible. Let’s say you have a job and you bring home $500 every week – that’s your take-home. After your taxes and your deductions that your employer takes out, you bring home $500 to make it simple. And to extend your lifestyle a little you have a credit card – 2 or 3 credit cards maybe. And you buy things on credit – some gas perhaps, groceries, some other things. You go to Macy’s and buy a shirt and all of the sudden, your $500 a week is being eaten up by debt service on things from these credit cards that you’ve long since used. You’re extending your lifestyle but it has a destructive end because it has to be paid back. Those are some of the bad things about credit cards. Another bad thing is that the average rate on credit cards – the average interest rate nation wide – is a little over 14%. And the average family owes a little more than $14,000 on credit cards. That may seem insignificant to you but did you know that if you had $10,000 on these credit cards and you paid it back at the average rate of interest, you didn’t miss any monthly payment, you made every minimum payment, it would take you more than 27 years to pay it off and more than twice of what you owe. That’s the destructive power of credit cards. They can also destroy your credit rating, your credit score. But on the good side, there are some good things about them. They can also help your credit score if you use them wisely. If you get the right credit card and you use it wisely, it can help build your credit score. The other thing is that in this world today, they are necessary. If you want to make a reservation at a restaurant, fly on an airplane, stay at a hotel, then you have to have a credit card. You just have to be responsible when using it. Credit cards can help you keep up with you spending. You get a report every month that shows you what you spend. Now a lot of you I know spend so much you don’t want to look at that report – you don’t want to see what it says. But you should. It’s good for tax purposes and other things and it tells you how far in excess of your lifestyle you’re living. Maybe you can get it under control. But those are some of the good things and the bad things about credit cards. My advice to you is to do what I’ve done and use a debit card. Debit cards limits what you can spend and takes out of your hands the power to spend too far above your income so that you can only spend what you already have in the bank. That’s a pretty good idea, folks. That’s the way I see it anyway.

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