I caught an article today which provided a list of bad credit card practices and ranked them accordingly.
How Bad Are Your Credit Card Mistakes?
by Erin Peterson
Wednesday, October 21, 2009
Nobody's perfect. When it comes to our financial lives, we've all done things we later regretted -- whether it's getting slapped with a $3 fee for using an out-of-network ATM or going on a Las Vegas bender and losing the house on an overly aggressive poker bet.
The key is to understand the scale of the transgression. With credit card blunders, that's no easy task -- is it worse to take a cash advance or to pay a bill a day or two late? Experts graded a range of credit card mistakes on a scale from 1 (losing a few bucks to a cash machine) to 10 (losing the house). Find out which worry the pros most -- and which may (almost) get a free pass.
I'm not going to cover this whole thing in depth, it's REALLY uninteresting and also sucky once one realizes how easy it is to make a lot of these deleterious choices, but I just want to provide a glimpse into the thesis.
How bad is it? 6
Paying Only the Minimum on Your Card
How bad is it? 4
The details: Credit card companies love it when you pay off your debt slowly, but you should loathe it. It won't necessarily affect your credit score, but that doesn't mean it's a good practice. Sending in only the minimum payment "is definitely going to keep you in debt longer, and you're going to pay a heck of a lot more in interest," says Francis. "You may be paying twice as much -- or more -- as you would by paying in cash."
So it pretty much goes on like this, which is fine, with the top-rated transgression being the following:
Debt Settlement Plans
How bad is it? 9.5
The details: If you're overwhelmed by debt, negotiating down your balance with the credit card company (also called debt settlement) sometimes helps you pay pennies on the dollar on your debt -- but you'll pay a steep price. First, there's the tax hit you'll take for the amount of debt that's forgiven -- it will count as income during that tax year. And your credit score will be decimated, so don't expect you'll be able to take out a loan soon after consolidation. Next to bankruptcy, debt settlement "is the most negative thing you can do to your credit score," says Francis.
Okay, that sounds bad. One thing though, shouldn't the worst mistake be, you know, putting the card up your butt? I mean, really? I think this is pretty obvious. Having a credit card all up inside of your butt would undoubtedly cause numerous problems for the individual in both the short and long term.
I feel like this was an oversight and/ or was edited out by the prudes at Yahoo, and that is why there is no "10" in the "How bad is it?" section. I feel bad for the author, so I'll do my best to rectify (pun obviously intended you are welcome, America) the situation.
Sticking the Card up Your Butthole
How bad is it? 10
The details: If you're one of these people (and we've all been there) who has been tempted by the insidious notion which has recently been advocated by social engineers, which suggests that by ramming your Discover card into your own butt we may collectively be able to change the definition of 'credit crunch' and thereby redefine the nation's economic problems and end the recession, well, you need to stop and think. Banks LOVE it when you shove your card into your own butt, because this almost always results in needing to order a new card. "'Selfing' your anus with your Skymiles Plus American Express card is very trendy and seemingly awesome" says Thora Silver, head of the Center For Studies on Criminally Insane and Majorly Retarded Practices (SCIMRP), "But really, it isn't awesome at all."
There you go gang. Once again WeakStream has come to save the day from censorship and provide you, the consumer, with the information you so desperately need.