Credit is a good thing and for most of us without it we can never buy some of the large ticket items such as a home or car. But like any good thing it has its bad side too. Basically these days if you have a job then credit is an easy thing to get. Think about it. Credit card companies exist to make money off of loaning money to you and collecting the interest payments as a result of it. They are not primarily there to help you as you might think. So you should approach credit with a high level of respect much as you approach a Cobra. Although folks in the United States rarely use the term it was used as far back as Biblical times. The term is "usury." It is technically illegal in the United States but in reality it goes on all the time. Usury refers to charging unusually high rates of interest for borrowing money. Just take a look at any title loan or payday loan business in the United States (these are very common in New Mexico) and you will see that usury is alive and well in practice if not in name.



As a real life example, a loan of $400.00 U.S. at one payday loan business will have to be paid in two weeks and have an Annual Percentage Rate (APR) of 570.31%. This means that in order to pay off the loan in two weeks you will have to pay $500.00 for the $400.00 you borrowed. If you ask for an extension, that will mean another interest period (as interest is compounded every two weeks) and in order to pay off the loan you will have to pay $600.00. As you can see that someone can be easily destroyed.

But it doesn't necessarily have to be payday loan place. Some credit cards charge in the neighborhood of 30 percent and you end up paying quite a bit of interest. This could mean that 60 to 80 percent of your monthly payment goes toward paying interest that will be compounding in the next billing cycle. If you have high debt then you quickly become enslaved. And if you miss your payments, you suddenly have bad credit or at least a higher interest rate and a late charge.

The damage credit can do to you if your balances get to high goes much farther than just high payments. When you get into a high-balance situation you can suffer from things like depression and hopelessness as all you see is that there is no way out. Those will be your first reactions anyways. And who knows what some people do when they are depressed. Some can't handle it well and the problems begin to multiply. If you find yourself in a situation of credit and balances gone badly, you must tell yourself that this could happen to anyone and keep your mental attitude straight.

Some employers have even gone so far as to check job applicants' credit histories which is probably one of the most unfair actions anyone can take but that is the reality of it. Many times people have a spell of poor credit history due to circumstances beyond their control. So take care of your credit and if you have not reached a high-balance situation then don't get there and if you are in one, do everything you can to start sending those balances the other way.