Credit is a game! And so is the Credit Score! Your credit score can increase or decrease without your knowing. It can decrease even if you think you are doing everything right and necessary to maintain a high credit score or rating.
Because banks and other financial institutions need money, they need for people to carry debt (interest). Interest that you're paying out (for credit) is debt and interest that you're receiving (e.g. banking saving account) is gain, or being technical, income!
Banks and mortgage companies need you to carry debt. God forbid you pay your monthly credit card balance off in full by each grace period. Banks and other lenders dislike people who do this and understandably so - they can't make any money off you if you pay your balance in full each month. As a matter of fact, nowadays (2010) banks and other lenders punish you if you pay your balance in full by the grace period or due date. In many cases, this actually lowers your credit rating.
Nowadays due to how banks have recently changed up the Game (penalizing folks who pay their balances in full each month) the best way to keep a high credit rating or score (if this is your desire) is to maintain a little debt (via interest), which you do by carrying debt month by month by only paying the minimum payment due on your account (and of course, before the due date) and for just a few months (3-6 months) before paying off the entire balance owed. You may maintain a high credit score by doing this, but you'll stay in perpetual debt and pay hundreds and thousands of dollars in interest over the long run depending on the amount of debt you have and owe. Again, interest that you owe out is DEBT!
Credit can be a great tool if a person has the financial education behind them or under their belt. If a personal is financially astute, mature, responsible, and accountable, credit is a great tool. If a person lacks financial education and is not financially astute, mature, responsible, and unaccountable, credit can become a tyrant, a slave master. You'll be working all the days of your life attempting to pay off your debt (which becomes very challenging due to the ever amounting interest that occurs on debt).
There are many people who will never pay off their debt in their present lifetime due to the programming they have received and hold on to pertaining to finances. Many people right now are already apathetic and see no way out. And whom can you fault? Banks? Lenders? Government? Well, they all play a role but then again, banks and government (corporations) have always screwed over the people, so at the end of the day, who can you really fault or blame but yourself?
While you may not be able to smoothly navigate waters in society today without a credit card, you are able to become financially astute and learn as much as possible about your nation's economy and economic system and thus formulate your own personal economy, an economy that does not have to follow the trend of the nation's economy.
I used to be horrible with credit due to my own financial ignorance. When it came to money all I originally knew how to do was spend it. I never received proper financial training or education before educating myself. In my days of ignorance, money was for only for one thing: spending!
Following the lead of my parents and other family members I looked up to, especially the female members, I learned how to be nothing but a consumer, a spender; and usually buying useless items - items that depreciate in value.
I was told to save my money, but how could I absent the self-restraint and discipline? Every time I saved, it seemed I was saving to purchase a big item within a few weeks or months. Or, someone (usually a family member) wanted to borrow money. It was horrible trying to save money in a household of consumers. If family members knew I had money saved, they asked to borrow some; and the bad thing with loaning money to folks you know is that in most cases you won't get it all back at the same time like when you first loaned it out, and that's if you get it back, or half of it back, at all.
It's always a pleasure or great feeling to receive money (be loaned money), but James Brown was right - payback is mutha!
Not to put blame on someone else outside of myself, but I learned my money mannerisms and behavior from my mother, who clearly learned her money mannerisms and behaviors from her mother. This was evident to see as pretty much my siblings and maternal cousins all shared the same money mannerisms and behaviors.
Because all I knew how to do when I got my hands on some money was to spend it, I did the same thing when I got my first credit cards. I charged away, thinking it was money that I didn't have to pay back, well, at least for 30 days.
I remember the rush of excitement I would get when going to the mailbox and getting white envelops from a creditor, pressing my hands on one side of the envelop to feel the accompanying credit card. That's how I knew if I was approved or declined. I could feel the plastic card in the envelope.
Because I lacked financial education, I never once read the contract or terms of use accompanying the credit cad. I was just excited to have a credit card and be like other people - having the privilege to charge myself away into perpetual debt.
I never even cared about the interest rate. I never looked for it to know what it was. All I knew how to do was take the card out of the envelope, look for the portion that told me what my credit limit was, activate the card, sign the card, and immediately begin using the card - buying useless stuff, stuff that depreciated in value at no time at all.
It didn't matter if a VCR cost $700, because with my Circuit City Card, my limit was $1,500.00 and the monthly minimum amount due was $10 (back then, c. 1991). I thought to myself; "What a bargain!" But little did I know what the bigger picture was. You see, back in those days I never read the small print. My eyes were only fixated on the large print. For example, Hi-Fi VCR only $29.95 per month. I'd look at a large ad with this on it and say to myself: "$29.95 per month!" "I can afford that!" But I never took into consideration the interest or late fee penalties on that $29.95 per month.
$30 dollar payments only seemed like $10 dollar payments each time I got my new bill. I was like: "How come this amount (balance) isn't going down or decreasing, but yet seems to stay the same and/or slightly increasing?" You see, I didn't understand interest back then, which was totally my fault. It was not the creditor's duty or responsibility to teach me about credit, interests, terms if use, etc. I simply initiated a contract with the creditor who granted my request (application) and granted me a privilege, a privilege that I didn't understand fully.
If I maxed out a $500 dollar department card store limit and had a monthly minimum payment of $50 due, I figured that if I paid the $50 minimum that I had $450 of available credit left or available to use, but back then, I never figured in the interest, which would be something like $25.00 - $30.00 dollars.
So in essence, after paying the $50 minimum payment with about $25.00 - $30.00 being deducted as interest, my available credit was actually $475.00 - $480.00, and not $450 (due to a $50 payment).
Now the problem was this: I would operate as if I had $50 of available credit left after my bill was received (paid), and I would make purchases within the $50 range and without even knowing it, was going over my credit limit and suffering penalties for going over my credit limit, and for a while, month after month. This was how financially ignorant I was. My financial ignorance cost me a lot of money. I tell people all the time: IGNORANCE COSTS! And in most cases, is very costly or expensive!
Intelligence and consciousness (awareness) can really save you a lot of money and headaches and grief. It really can. Investing in intelligence, knowledge, information, and consciousness is far cheaper in the long run that being and remaining ignorant, uninformed, and unaware.
Many times during heated arguments, my mother would tease my father of only having a 10th grade education and not finishing school, but while pops never finished high school and my mother did and even went to college (Compton College), my father clearly was more financially astute than my mother in my opinion, though my mother had awesome luck with money - attracting it. He was unlearned and un-degreed, but he had common sense. He would always tell me to avoid credit and to instead buy gold because it didn't lose its value and that I could always pawn it if I needed cash. His advice came in very handy too during those trying financial times I needed an extra $80 or $100 to hold me over till my next payday at work.
Because I had many gold necklaces, rings, and bracelets, I could always get a loan from the local pawnshop not far from my Gardena, California apartment on Raymond Avenue.
Despite operating on poverty, scarcity, and lack consciousness, my father taught me about survival. My mother's financial advice and the mannerisms and behaviorisms I picked up from her (coupled with my own flaws which appear in my numerology and natal chart and are carry-overs from my past life) would land me into debt and my father's financial advice would help me to weather many storms caused by my debt. But only financial education would keep me out of debt.
My father's advice helped me to stay afloat until I eventually learned about mental science and prosperity, success, abundance, affluence, and wealth consciousness. To this very day I am grateful for my father. My father received a lot of teasing from my mother and my aunts from time to time over the years for being a country boy so a lot of my willingness and eagerness to break off (retort, riposte) would-be educated and degreed people comes from desiring to show that just because you're from the city and went to school and graduated and got a blank piece of paper called a degree doesn't necessarily make you 'all that and a bag of chips.' 
In many respects my father was the wisest man I knew despite never graduating from high school. What he had (common sense) took him farther in life than most of the people who teased him or made fun of his not being formally educated. It was because he was not formally educated that he had all the sense in his head that he did. Actually, all of my paternal uncles had good sense (to a certain degree), though strangely and oxymoronically having habits that went against good sense, e.g. drinking alcohol, smoking, eating meat and other insalubrious foods, etc. but it's so common with many people who are educated but yet-in-still still doing things against good sense and common sense, and I won't even mention against higher law (Universal law), Nature, human biology.
My beloved father really impacted me in the younger years of my life. I wouldn't have made it this far in life without his advice, counsel, and guidance in my earlier days. It is truly my children, his grandchildren, that are the true recipients of his sage counsel and advice because I will take his wise advice, refine it, add to it, and give it to them so that they can make their way in this Matrix.
However, I am the recipient of all the good information and advice from both my beloved father and mother. My mother had book smarts and my pops had street smarts, so I got the best of both worlds. It was my mother who taught me how to fill out applications (any kind of application). My mother wanted my siblings and I to simply have the best things in life and it wasn't anything wrong with that. She gave us information and advice that she had to give based upon all she knew at that time in her life, and a lot of it was good and sound.
To this day and forever, I will always live a part of my life in honor of my parents, all they did for me (and my siblings) so that we could have and be the best in life; for all of their sacrifices so that I (and my siblings) could have and experience certain things in life. Many times after heated arguments and fights with my mother, my father could have left us (as many men do nowadays and in a heartbeat), but he always thought about his children and the ramifications and repercussions of leaving his children. He always put his children above and beyond himself. My mother did too. I had awesome parents and they gave me my foundation in life.
The trust my parents had in their children was so empowering; so was their belief in their children. I can't express in words what this did to and for me personally. To always know your parents trust and believe in you is powerful. Even against schoolteachers that many of my friends' parents would automatically trust a teachers' word about their own child even over the child's word. Not so with my parents! My parents knew if and when we were lying and when we were telling the truth and in every situation we had a legitimate problem at school and with a teacher, my siblings and I always told the truth and my parents knew it and would tell a teacher straight up "My child ain't lying!" and then the teacher would be in trouble.
I witnessed on many occasions my father putting respectable fear in teachers, even my sixth grade teacher, Mr. Justus Knight, a tall and large-framed Black man (who was actually a very good teacher). While other students were at the mercy of Mr. Knight's physical reprimand, Mr. Knight knew better to touch the child of Earnest Cooper Sr. The same thing went for the king of discipline at 107th Street Elementary School in Los Angeles, Mr. Joe Todd, the after-school aid who ran the playground. Mr. Todd was the father to many children who didn't have a father, or, he was your father and guardian when your father and/or guardian weren't around. Man, those were the days back then, growing up in South central Los Angeles and attending 107th Street Elementary School.
The best times I had in my life were during the 1970s and 1980s residing on 105th Street in South Central Los Angeles and attending 107th Street School.
Nowadays, they don't have teachers like they did back during those days at 107th Street School. Those teachers made profound impact on the lives of many students, including myself. But enough about that and back to the gist of this article.
Remember this about credit cards: If you use a credit card and pay off the total balance before the due date, credit cards are helpful in a society such as ours. However, if you're like 90 million Americans who don't pay off their balances in full each month, credit cards rob of you of money via interest and keep you in debt.
If you make your credit cards work for you and without harming you, they're okay and helpful to have; but on the other hand, if you're working for credit card companies (issuers) because you're paying off debt each month, credit cards are detrimental and will keep you enslaved.
Credit cards are not the ticket or way to financial abundance, prosperity, and/or wealth. Credit cards just allow for easier transactions in society. They have nothing to do with creativity.
Depending upon your financial consciousness, credit cards can either help you or harm you. In the United States, credit cards help 55 million people and harm 90 million people.
The 55 million people pay off their credit card balances in full each month whereas the 90 million people carry debt from month to month because they don't pay off their balances in full each month.
Credits cards are like fire: they can help you or harm you based upon the choices you make with them.
Thank you for reading!
This article is compliments of Dherbs.com
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