9 Crucial Reasons to say NO to credit cards!

Your eye has been drawn to that television set you've been eyeing, that video game console you've been eyeing, or perhaps those shoes that would look great with your new jacket; in addition, she has had a difficult week and would like to go to a restaurant and party, so he decides to make an advance payment on his credit card. 

People’s tendency to engage in these practices is a classic manifestation of the simple and quick indebtedness that they have encountered. We will provide you with some plausible explanations for why all of these urges are not beneficial to your financial situation.

1. Taking out a loan to pay for your items does not demonstrate self-control!

Having little control over your spending and the lack of the ability to exert such control might lead to a lack of financial security in the future. When it comes to economics, the worst thing that can happen is to have an impulsive attitude toward purchasing. It can be tedious, but it will pay off in the long run with benefits such as the prospect of paying for your own home. Keep in mind that one of the most significant areas of your life is your financial well-being.

2. By using your credit card to make purchases, you may be extending your financial resources!

Don't have a budget to work with? I suppose I should begin with that. For many people, a budget is a tool that helps them keep their spending in check. To make things worse, it's all too easy to forget how much each item you wish to buy costs. Add it all up at the end of the month and check whether it was what you had planned and how much you could afford to spend.

3. The interest rates on credit cards are the most costly! 

The current consumer credit interest rate is 17.69 percent, while the current usury rate is 26.54 percent, according to the Federal Reserve. Interest rates for credit card payments are close to 26 percent, while interest rates for advances are close to the usury maximum. As a result, financing your goods becomes quite costly. If you bought a $1,000 at a 26 percent annual effective rate, you may be paying as much as $260 in interest each year on your investment.

It is crucial to notice at this point that interest rates are rising, and the ones that rise first are those associated with spending, and the balance of your debt will increase over time if you continue to follow your impulses.

4. Defaulting on a loan is quite costly

You will incur additional expenditures if you do not pay your credit card bill on time. If you do not pay your credit card bill on time, the bank will charge you interest at the rate of usury on the balance of your debt. 

You may believe that something like this would never happen to you and that you will be able to pay everything in one lump sum, but the unexpected or even losing your job might force you into this situation if you do not plan ahead of time and manage your finances properly.

5. It is essential that you maintain a good credit history

The lack of positive credit history might impair your ability to make major purchases, such as a home. If you do not pay your credit card bill on time, your credit score will suffer, and you will have fewer opportunities to obtain more items or interest rate benefits that you may otherwise be eligible for. 

If you are considered a high-risk customer by the bank, you may not be denied credit, but you may be charged a higher interest rate, which results in more expenditures and additional money.

6. Your relationships are jeopardized by poor financial practices!

One of the primary reasons for couples and families to separate is money. Due to the complexity of the situation and the need for planning, it is imperative that you create a budget with your family and stick to it. Avoid acting on impulses that divert you away from your genuine financial objectives.

7. Purchasing items with financing, results in increased spending!

Some people spend more money than others, either by purchasing more products or by purchasing items that are more expensive. When you pay for a credit card, it is simple since you only have to sign a piece of paper before you can have what you want. 

Furthermore, paying with cash gives the impression that money is being taken from your possession. Paying using cash will allow you to see exactly how much money you are spending and how much money you have left in your wallet.

8. The worst-case scenario, the practice of financing all of your purchases may result in bankruptcy!

If you decide to max out your credit cards without making a plan to pay them off, or if your plan goes awry for any reason, such as losing your job or experiencing a domestic tragedy, you will almost certainly find yourself in a state of debt from which it will be difficult to recover.

9. Being debt-free will provide you with peace of mind!

If you do not owe someone any money, you do not need to be concerned. Default interest, late penalties, and handling costs are all possible. They will not be a source of concern for you. The greatest time to indulge in something good is when your financial situation truly enables it.

The Bottom Line

Remember that just because you are not financing your purchase does not imply that you should not have a credit card or that you should never use one. Deferring your purchases for a price allows you to take advantage of all the benefits and incentives that the retailer has to offer, such as special discounts and agreement terms and conditions. Credit cards may be a very beneficial tool if they are utilized properly.