The 7 deadly credit card sins
There are the seven traditional deadly sins, but they also have financial equivalents. Commit one or more of the financial seven deadly sins, and you mightfind yourself headed straight for credit card hell.
That plastic in your walletmakes it easier to fall prey to temptation, but with a little help from personalfinance experts, it shouldn't be too hard to trade vice for virtue.
1. GreedAn insatiable desire for material possessions -- and usingcredit to buy them -- can lead to loads of debt. Melissa London, apublic relations professional in North Carolina, says that after a divorce a few years ago, she racked up a debt of more than$25,000 on six credit cards. She admits tosuccumbing to almost every credit card sin, including greed. "I would go outfor fabulous dinners with friends, pamper myself, and fill my closet withhigh-end designer clothes," London says. Her most frivolous purchase: not one,but two, pairs of pricey Christian Louboutin shoes. "For some reason -- mindyou, I was a stay-at-home mom at the time -- I really felt the need to havedesigner three-and-a-half-inch stilettos," she says.
For consumers tempted by this sin of excess, GailCunningham, vice president for public relations for the National Foundation forCredit Counseling, recommends a financial reality check. "It's important totake an honest look at your finances, admit you have a finite amount of money,and make choices about how to spend it," she says. "Being greedy can lead tofinancial ruin."
2. GluttonyThere's no doubt consumers often overindulge -- look at theburgeoning obesity epidemic in the United States and elsewhere -- and it'seasier than ever to finance this gluttony with plastic, according to LarryWinget, author of "You're Broke Because You Want to Be: How to Stop Getting Byand Start Getting Ahead." "I was standing behind a woman in an airportrecently, and she tried to charge a candy bar on a credit card and it wasdeclined," Winget says.
Instead of pulling out a credit card to buy junk food orbooze you could end up paying off years later at an exorbitant interest rate,carry cash for small indulgences -- or skip them. Winget advises, "If you can'tbuy a Snickers bar with cash, chances are you don't really need it." ButCunningham, who often pares spending and cuts calories by splitting arestaurant meal with her husband, says: "Cutting back is much easier thancutting out."
3. EnvyCoveting shiny items bought by friends, neighbors -- andeven people on TV -- can lead a cardholder to temptation."We're hugely susceptible to watching people on TV and saying 'I want thatnow,'" Winget says. "You watch stars walking down the red carpet at the Oscars,and by noon the next day there will be stores selling knockoffs. Clothes areone of the biggest ways we envy other people."
Seeing others with new high-tech gadgets also can causeenvy, says Steve Rhode, a consumer advocate with GetOutofDebt.org. Rhoderecently counseled a college student who wanted an iPad because his all of hisfriends had them. "He wanted to put one on his credit card, but his cards wereall maxed out," Rhode says. "I said, 'Don't put it on the credit card.'"
Cunningham's advice: Only buy a coveted item with yourcredit card if you can pay it off right away. "You aren't going to be the envyof anyone if you go into debt," she says.
4. LustThere is no question that lust -- whether in the traditionalsense of the word or the more general sense -- can get consumers into troublewith their credit cards. "There's just this lust for more -- this insatiabledesire to have the newest and the best," Cunningham says.
Sometimes, though, lust is just lust. Rhode once counseled aclient who convinced his wife to get a $15,000 breast augmentation he couldn'tafford -- and put it on his credit cards. "I asked him why he had done that,"Rhode recalls. "He said 'Well, they just look so good.'"
If you're lusting after something, experts recommend waitinguntil you have the cash to pay for it.
Personal finance experts say it's important to open creditcard statements as soon as they arrive, scrutinize them to spot any added fees,mistakes or fraudulent charges -- then pay the bill right away. "If you're lazyabout organizing your finances, that's a real problem," Cunningham says. "You needto work hard and really get on top of it."
Consumers also should put effort into periodically shopping around for the [%Link?type=cardcategory&id=83&text="best credit card"], experts say. "People, out of pure laziness, won't bother to lookfor a better deal or opportunity," Winget says. "Most of the time, you don'thave to leave the company you're with to get a better deal. You just have to bepersistent, and it might take five, six, seven calls."
When Winget hosted the A&E series, "Big Spender," inwhich he helped people struggling with debt, he met a couple who fell victim torevenge spending. The wife, Winget recalls, was addicted to shopping on eBayand had filled a closet with purchases she hid from her husband. "When he didfind out, the way he got even was to go out and buy a motorcycle," Winget says.
Racking up debt on credit cards to get revenge typicallybackfires. In the case of the eBay shopper and her husband, it just got them indeeper financial trouble. "They couldn't afford the junk from eBay -- and theydefinitely couldn't afford the motorcycle," Winget says.
Pride also is a top reason consumers in financial troubledon't seek help from the lender or a financial professional, says Cunningham."People are very reluctant to discuss financial distress -- they think, 'I canresolve this on my own,'" she says. "But delay only makes the problem moredifficult to resolve -- the sooner people can reach out for help, the betteroff they'll be."
The key to deliverance from all the seven deadly credit cardsins, experts say, is to take an honest look at your behavior around creditcards -- and your motivation. "Money problems are never just about the money, there'salways an underlying issue," Rhode says. "Taking a moment to be self-aware isthe single most powerful tool you can use to break the cycle of debt."
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