Topic for final paper Week Two Assignment

Credit Cards play a large role in the average family’s economic crisis in the United States today. It seems that far too many people cannot budget their monthly expenses and credit cards are filling the gap between expenses and income. My advice to anyone that will listen is to live within your means. Some people are able to bridge this gap responsibly, but this is the exception rather than the rule. Every family needs to sit down and realistically prepare a budget. Define what things the family needs and at the bottom of the list define what things that the family wants. Items we can’t live without, (rent, power, water, insurance, food, and gas). Items we want, (cigarettes, soda pop, Starbucks, movies, and cable television). Calculate the monthly cost of our wants and needs. Once that magic number is agreed on calculate the family’s income. Unfortunately, the family income is usually a much easier number to understand. Whether it is one paycheck or two, the net income is what we have to work with. If the expenses are greater than the income, the credit card is not going to fix the problem; instead it will only enhance the problem exponentially. If you are unable to pay off the credit card each month, the interest rate can add up quickly. Once a person is in this predicament balance transfers to new cards, and credit card checks are the next way to fill the gap. Unfortunately, the credit cards companies have seen this played out too many times and quickly reduce your available credit once a pattern of increasing debt is spotted. This occurs far too often these days and the next is as predictable as well. The next step is to get a pay day loan. Once a family has reached this point, it is too late to fix the true source of the problem and bankruptcy is