It often seems like everyone has a credit card. This does not mean they’re good, though. Below are ten reasons why you need to stay away from credit cards.
Credit cards require you to spend more money in order to spend your money. This is a great way to reduce your own wealth and keep you in a cycle of poverty. A high interest rate can turn a small purchase into a lifetime of regret.
Never trust a contract in which the fine print makes up most of the paperwork. Credit cards are awful about hiding fees and hidden costs. If they were trustworthy, you wouldn’t need a magnifying glass to see the important stuff.
A credit card can hurt your credit score even if you are responsible. Your credit score can drop several points when you pay off a balance, and your credit history will require you to keep money on your card in order to keep the score at a decent level.
Ease of Use
It’s just too easy to use a credit card. All it takes is a swipe or tap and your money is gone. While debit cards are just as easy, at least they take your money away immediately. A credit card allows you to stay ignorant until the end of the month.
Credit cards help teach you that you don’t have to save. After all, why save money when you have access to a credit line? They can help you out when you are in need, but they won’t teach you the lessons that you need to survive.
Need to do anything other than buy with your card? There’s a fee for that. Credit cards charge you for almost everything, including paying off your debt.
One of the problematic issues with credit cards is that they teach you to be bad with money. They teach that you can buy without thought and pay off fees even when you don’t have the money. While credit card companies are getting better about showing the real cost of use, they certainly don’t advertise it to potential users.
You’ve probably seen dozens of credit card companies brag about having low APR or having great cash-back deals. What they don’t tell you is that these deals usually expire after only a year. After that, you’re stuck with an expensive card that really does you no good.
Don’t have the money? If you’ve got a credit card, you don’t have to worry about that. These cards encourage you to spend money on an impulse, hoping that you’ll be able to pay off the charge later. This is an incredibly dangerous type of encouragement that traps many in debt.
The Debt Trap
The biggest reason to avoid a credit card is due to debt. Credit cards are fantastic tools for getting caught in a cycle of debt. If you start to pay down your balance, the credit card company will raise your credit limit in order to encourage you to spend more. Don’t fall for the trap!