Opinion: Credit cards are dangerous things

If no one explains to you the perils of credit cards and loans and how quickly the interest can turn a small debt into a giant one, you are going to learn the hard way. Photo/Getty Images

Credit cards are dangerous things.

In today's paper, Tauranga's budget advisory service tells of one family who sought help after finding themselves $380,000 in debt.

At first I wondered how that could happen but I soon realised it is simply a lack of education.

If no one explains to you the perils of credit cards and loans and how quickly the interest can turn a small debt into a giant one, you are going to learn the hard way.

Credit cards are so easy to get your hands on these days and it is scary how many people are using them totally unaware of the consequences.

There are benefits to credit cards if used the right way. They can be helpful in businesses for paying end-of-month accounts while waiting on the money you are owed to come in. Using them can also help you clock up reward points.

But, they need to be used carefully.

To me, the most simple way to keep yourself out of strife is to only use your credit card to buy things when you already have the money in your bank account - so you know you can pay it off before the end of the month.

It's not a good idea to be using credit cards to tie you over to the next payday or buy something you can't quite afford yet.

If that's the way you are using them, I recommend getting some budgeting advice right away. Ask a friend or family member you trust and who is good with money to help you out, or visit the Tauranga Budget Advisory Service.

If you are struggling to make ends meet and relying on a credit card or loan to help, you're heading towards dangerous territory.

It's better to get some advice before you find yourself sinking further and further into debt.

No matter how old you are, don't be afraid to ask for help. People won't think less of you, in fact, they'll admire your effort to get your finances into order.