WalletHub: Marick Masters on credit card management

Marick Masters, professor of management and interim chair of finance, Mike Ilitch School of Business, participated in a Q&A about the term free credit card. “Anything that uses the adjective "free" automatically raises doubt in my mind. There are costs to all transactions, with the only question being how transparent they are. So when I hear the term I look for where the costs might be hidden. The "average" consumer knows instinctively it sounds too good to be true, but the prospect of deferring payment without incurring super-high interest charges until much later, plus no annual fee, may prove too tempting. The real hidden cost of credit cards is that payment is delayed, relieving the immediate sting of a purchase. But everything comes due. People need to manage their credit card accounts just as they would their checking accounts and feel the pain just as if they were paying cash. This psychological adjustment would do more to reduce the high burden of credit card debt, much of which is incurred for unnecessary purchases, than anything else.”

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