Growing Credit Card Debt and Increased Gas Prices- A Disturbing Trend

Posted On: September 23, 2005

By Mike Killian, CardRatings.com Credit/Debt Managment Reporter

Though there has been some minor relief at the gas pump lately, CNN reported that in August 2005 convenience store fuel charges paid by credit card increased 16%. This seemingly innocent fact translates into a rather alarming trend since convenient stores account for 75% of all gasoline sold nationally. This increase means that 70% of sales of the highest source of gasoline distribution is now done by credit card. CNN also reports that according to a convenience store spokesman: “Consumers are trying to displace the pain [of gas price increases] for a few weeks.”

My question is this. If we as consumers are so strapped for cash that we must offset increased fuel costs by using credit cards, how will we ever afford the payment for the card when it comes due?

The answer is quite simple. We will only pay part of the bill. But this means we must use our future money to pay for our past consumption. Does this make financial sense? Should we be so willing to jeopardize our future wealth? And what if we don’t even have a job next month?

Now lets add to this bag of tricks and ask, “What will we do when our credit card payment doubles with the coming increase in minimum payments as now dictated by law?”

And if all of this is not enough we must still contend with such issues as ever-increasing over the limit fees, late payment fees, and other associated fees.

Finally, let us not forget the little clause in most everyone’s credit card contract called Universal Default (see also PBS’s Special- Secret History Of The Credit Card). Did you know the credit card company could raise your interest rate if you are late on ANY payment? I; don’t mean late just on another credit card, but to anyone.

So what is the solution? There can really be only one solution, reduce your debt in anyway possible and start paying in cash if you are unable to pay your credit card bill in full each month. Find ways to increase your income or reduce your expenditure. It is that simple… not easy, but simple.

We welcome your comments about credit card debt in our popular credit forum!

Mike Killian has been writing about credit and debt management issues that are of importance to consumers for over 8 years. He formerly served as the Guide to About’s credit site, which was recognized by Forbes Magazine’s “Best of the Web” for 5 of the last 6 years. Mike has also offered debt elimination seminars to businesses and community colleges for many years.

Mike offers free consumer advice on the CardRatings.com Credit Forum as well as on his own site, FreeMoneyTraining.com. While at his site, you can view additional articles as well as his schedule of upcoming seminars.

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