Demerits of credit cards: Why you need to ditch them

Credit cards have taken up a major portion of our lives and we have felt their power in most sectors of our purchasing experiences. They have brought joy into our lives and taken away the headache of carrying around hard cash along the insecure streets. However, there’s always a downside to everything and it’s important to be in the light when any of the dark effects come hauling back at you.

Overuse.

The first disadvantage is the temptation of overuse. Credit cards are a way of taking loans and then finally paying for them when they are due, it’s using money that isn’t yet yours and this creates the possibility of going beyond your pay grade. The swiping action could further make it extremely easy to just keep on spending and you may end up using more than you can pay. Interests rates are charged on the amount due and the cumulative effects could lead to your financial downfall and within no time you’ll be drowning in debts.

Negative credit card scores

Uncontrolled usage can not only lead to the ever increasing debts but can also wound your credit card score. This will lower your points and stain your image to banking institutions making it close to impossible to secure a decent loan. Many end up seeking refuge from credit cleaner companies to save them from doom but the light at the end of the tunnel turns into a deadly fire. This is because they instead end up falling into a credit cleaner scam trick and lose even more funds.

Initial teaser rates

Credit cards also come with enticing teaser rates. These are the low rates initially offered to attract customers that eventually expire giving way to the monster interest rates that can take the balance you have pending to the skies. It’s therefore crucial to know the rules of the game and fully understand what you’re getting yourself into before getting into the waters.

Hidden costs

The hidden costs in owning a credit card can also prove to be a pain. Apart from the interest rates, there are also other penalties charged, for instance when you exceed your credit limit. Some fees are also charged for late monthly payments or failing to pay altogether. Withdrawing cash on the card is a wrong move, a 2% interest is immediately charged when your card makes contact with an ATM machine and there’s also additional cumulative interest on the money withdrawn.

Risk of overcharge

A credit card requires the owner to be in constant alert and you need to check your receipts and compare them with your statement monthly so as to avoid being overcharged. With all the frauds out there it’s vital that you keep tabs on your card and receive the necessary credit on incorrect charges.

A credit card is like a blazing fire, it makes a surprisingly good servant but a really bad master. It can be the staircase of your prosperity or the path to your doom and this all depends on how well you use it.