Credit cards, the good, the bad and the uglier it gets

These are the times to take care.  As prices inflate and salaries stagnate and unemployment hovers above the 5% rate, it would be easy to return to your use of credit cards and lines of credit (if you can obtain them since the lenders did their reassessment resets) for supplemental funds.  It would be easy and oh so greasy to slide back into the cocoon and weather the storm.  But don’t do it.  Stay lean, and mean if you have to, but don’t let this bubble burst economy bring back the mind set upon which credit used to be based.  For one thing you should note that even though the FED has lowered its rate and the banks are showing lower interest rate earnings on your money, the credit card industry has not responded in kind.  As a matter of fact they are all beefing up their rules and warning anyone who defaults in one area that the info may/will affect them elsewhere.  For another thing, this is a time when we need to remember why we chose, needed to choose, to be frugal in the first place.  In times of stress, it is easier to fall back, without noticing, into the old addiction. 

Take a Frontline look here if you need reminders of what the credit card industry is like.   One step you can take that may help in keeping yourself straight is to update your budget.  Take a fresh look at your expenditures over the last couple of months.  Prices for food and goods are increasing.  So recalibrate the amounts allocated for your basic expenses.  A second step might be to think about taking a Staycation this year instead of the planned drive across country to Disneyworld.  A third step should be to pull out those ideas you had last summer (when the fuel rates were lower than they are now) for using your vehicles less.  You know carpooling, using public transportation, stacking tasks that require car use so that they happen on one trip instead of several, and parking the car on the weekends except for necessary use.  And A fourth step is the one you take every time you decide not to use that credit card.

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