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Think that misuse of credit cards and a bankruptcy could never happen to you? The above visual guide demonstrates the credit card statistics behind the increasing number of personal bankruptcies in the United States and the role that credit card debt plays.

Learn to manage your credit responsibly and take steps to protect yourself from being a bankruptcy statistic. Why? Because you just never know.

Take charge of your financial future by spending less than you earn, paying off your credit card balance every month, and either making credit work FOR you with a rewards credit card OR don’t use a credit card at all!

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5 Responses to “Credit Cards & Bankruptcy: A Visual Tragedy”

  1. Sounds pretty logical to me Joel! :)

    Damn, 1 million bankruptcies huh? Incredible.

    Maybe nobody should have a credit card then, b/c the temptation may be too great?

    • Joel says:

      @ FS

      Thanks for stopping by – bouncing checks and overdrafting with a debit card can also be a temptation to some. I really like this analogy from Craig Ford over on Moolanomy:

      Setting: A nosy neighbor comes into my home and sees my circular saw and says:

      Nosy Neighbor: “Hey Craig, you need to stop using that saw because if you ever took the blade cover off it would slice off your finger.”

      Me: “But I never take the blade cover off.”

      Nosy Neighbor: “I’m just saying if you did take it off, it would be dangerous.”

      Me: “I don’t take it off.”

      “Many of the conversations I have had about credit cards and debit cards have sounded much like the conversation above — except we talked about the two forms of plastic. The concerned citizen says my credit card is a danger to my family, my future, and my finances. I say my track record has proven otherwise. And around and around we go in circles. It is almost as if people are unwilling to have a rational discussion about the advantages of credit cards.

      If the discussion was about plastic versus cash, then you have some valuable arguments in favor of cash being cheaper. However, because plastic is more convenient people start to make a big deal about how you should use a debit card and not a credit card. If the discussion were about poor money managers who did not use credit wisely, then my view would be different. But for people who manage their purchases and pay off their bills each month, I think carrying a credit card is fine. And to be on the safe side, our family has established some credit card guidelines that protect us from improperly using the cards.”

      Here is the link to the full article because I think that Craig has done a really nice job explaining some of how I feel in regards to the importance of establishing smart credit card guidelines and being responsible with credit card use because if you think about it – NOT using a cash back credit card and paying off the balance every month means that essentially you are always paying full retail price instead of getting the 1% to 3% discount that the cash back credit card would give:

      http://www.moolanomy.com/2107/why-credit-cards-rule-over-the-inferior-debit-card-cford10/

  2. Matt Jabs says:

    For all the arguments made for or against credit cards, you sum it up pretty well in that last statement:

    “Make credit work FOR you with a rewards credit card OR don’t use one at all.”

    Although I addimately oppose the predatory marketing/lending practices of most credit card banks, it is not the credit card that gets people in trouble… but their own use of it.

    • Joel says:

      Yep, I am 100% opposed to any type of deceptive marketing tactics by banks but it seems that many people attempt to say they got taken advantage of when they knew full well what they were getting into but they just don’t want to take responsibility for their actions.

      A cool tool for illustrating the potential cash back rewards that one can earn is the cash back credit card calculator here: http://www.creditcardchaser.com/credit-card-calculators/cash-back-credit-card-calculator/

      According to the tool its not unthinkable for someone that just had a baby to use their cash back rewards card for as much stuff as possible and then by the time the child is ready for college those cash back rewards checks could easily have grown to enough money for at least one semester if not one entire year of college tuition (and that is not even assuming an interest rate if that cash back money was put into a savings account)!

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