There are many reasons why you should avoid credit cards especially if you are trying to get out of debt. Below you will learn our top five reasons why credit cards can get you into trouble.
With the cost of living constantly increasing and everything being so expensive, sometimes using a credit card can seem like the answer to your problems. However, credit cards can do much more harm than good. It is easy to get sucked into department store credit cards when you are making a purchase. The clerk always has an amazing deal to save 20% off your entire order if you sign-up. Even though it sounds great at the time to save that money there are various ways that it can harm you in the long-run and you will be paying back double the amount.
I am not saying all credit cards are bad. Obviously they are nice to have in the case of an emergency or to rent a car, but many times it is just too tempting to just charge it, so here are 5 important reasons why you should avoid credit cards.
Why Should I Avoid Credit Cards?
1. Living within a budget is a great way to really get ahead financially and not carry debt. Using a credit card can totally blow your budget. It will add an additional bill every month that can easily bring you over your monthly budget. Be sure to use our Monthly Budget Spreadsheet to help you gain control of your finances.
2. It can set a bad example for your kids. When kids see you paying for purchases with a credit card, it is easy for them to perceive it as free money. They do not get the concept that you buy now and pay later. Use cash and teach your children what a budget is and why it is so important.
3. With interest rates and hidden fees you can easily end up paying twice as much compared to if you paid with cash. Especially when they can tack on late fees on top of your monthly payment.
4. They can be a major temptation. It will be hard to say no to big purchases when you know you can put them on a credit card. This is an easy way to put yourself in a financial hole.
5. When you build up credit card debit it will lower your credit score and can end up costing you in the long run. A lower credit score can affect how much you pay for insurance and even prevent you from renting an apartment.
Using credit cards is an easy way to get into debt, spend more money and add financial stress to your life.
Also, make sure you checkout the Frugal Fanatic Facebook page and follow us on Pinterest for DIY projects, recipes, money saving tips and more. When you are tempted to use or apply for a credit card take a look at our 5 reasons you should avoid credit cards to help prevent yourself making a bad decision.