In the era of online shopping, we have gone through a lot of cases in which people due to their recklessness spend a lot of money and go broke by the end of the month. Credit cards were created to make our lives simple and easy, to ensure we have access to our savings anywhere at any part of the world but obviously, but of course nothing comes without its own set of cons to it. Credit cards because of its easy access made people a spendthrift and reckless in all senses.
T.Harv Eker had once said, “If you don’t have the money management skills yet, using a debit card will ensure you don’t overspend and rack up debt on credit card.”
Who doesn’t agree to it? Let us go through 7 types of people who should always avoid using a credit card.
1. Spendthrifts
The people who spend money without giving a second thought and extravagantly. A credit card makes people spend more than what is required and for the extravagant ones who live beyond their means should never have a credit card. Credit Cards are self-destructive to them for lacking financial discipline.
2. Undisciplined Bill Payers
These are the ones who never pay their bills on time. Having a credit card will make them pay more than what is required for the bill since, after the deadline, a high rate of interest is applied in addition to the penalty for missing the deadline. According to a recent report by NerdWallet, Americans are overdue on billions in credit card debt (more than $23 billion overdue) and credit card delinquencies are rising fast. Reason for this?– Most of them just forget to make payments on time.
3. Persons who revolve their credit
Credit Card companies beautifully claim to have been advising their customers to clear the minimum amount due on time to avoid any interest, fee or charges but the truth lies in the fact that they actually want their customers to revolve their credit card debt otherwise they won’t be able to make any profit.
4. Funding their everyday expenses via card
Individuals who fund their everyday expenses via credit are more likely to go broke by the end of the month and often after that will fall into the revolving credit trap and have long-term debt problems.
5. Multiple sources of credit
People having multiple personal loan accounts or credit cards will start accumulating debt for over a time period and end up getting rejected by lenders in future which will automatically impact their credit score.
6. Careless People
Individuals who tend to forget to keep their credit card back safely after use are the ones who land into big problems. Being careless with your cash and then credit card erroneously disclosing PIN numbers can lead to massive and unimaginable losses.
7. Who hardly use the card
Over usage of credit cards can affect your credit score and hardly using the card would ruin its purpose because they are a great medium to get rewards. These rewards help you getting free gifts for yourself.
These points prove how important a credit card is and also things that must be taken care of before being a credit card holder. Proper utilization and discipline is a must and the next time you apply for a credit card make sure none of these points match with yours.
