These few reasons why you shouldn't use a credit card.

Here are a few reasons why you shouldn't use a credit card.

There are a ton of people that use credit cards out there and honestly I don't have a problem if you're using a credit card. I just want to make sure that you're being responsible with it because honestly they do have their pros and cons. but the point of this article is that there are specific things that you might be doing with your credit card and in that case, you really don't want to be using a credit card.

if you're doing certain things and that's what we're going to be going over the first reason you should stop using your credit card is very obvious and it's just the fact that if you are paying interest on your credit card and you're carrying a balance then you really should stop using it because it is extremely expensive. so if you happen to be making minimum payments those are going to get you nowhere you're basically paying 99 interest and one percent principle so please stop paying the minimum payment. if you're doing that and also if you're taking out cash advances or anything like that the interest is extremely expensive on those so stay away from cash advances minimum payments and obviously carrying a balance. because it's just not a good thing to be paying any interest on your credit card. when you don't have to credit cards typically charge about 18 percent in interest per year obviously those rates can fluctuate but as an average 18 is a pretty good ballpark but honestly if you compare it to the stock market's track history you'll find that the s p 500 index has averaged about 10 in returns in its lifetime so if you're looking at 10 in returns versus 18 that you're paying on your credit card obviously your credit card is a lot more expensive than what you can typically expect to get out of the stock market so pay off that credit card do not pay interest on it because it is always going to be far more expensive than most of the investments out there that you can do and I've said this in a lot of my article.

but if you don't want to pay interest on your credit card all you have to do is just pay off the statement balance in full by the due date every single month and as long as you do that you're not going to be paid an interest on your credit card and it is as simple as that now the next thing you might be doing with your credit card. that's not really a good thing is if you're justifying paying interest in order to get rewards points or you just signed up for the credit card because it had such a good sign up bonus and that's why you got it and now you're paying interest on it because like I said I don't want you to be paying interest on your credit cards but you really shouldn't be justifying getting rewards points or sign up bonuses in order to get into debt. because that's really not what you want to be doing here taking advantage of sign up bonuses and rewards points is a good thing if you're doing it correctly because honestly let's say if you get a five hundred dollars sign up bonus for spending three thousand dollars in the first ninety days if you can actually afford to spend that three thousand dollars then that's fine go ahead and get that five hundred dollar sign up bonus but if you're spending money that you don't have in order to get that small reward that is not worth going into debt over because the interest alone is going to cost you so much more in the long term than the 500 sign up bonus that you get for spending all that money so if you find yourself justifying the rewards points or the signup bonuses to get into debt then you probably shouldn't be using that credit card just as a rule of thumb now another reason.

you might want to stop using your credit card is if your current balance is extremely high compared to what your limit is so for example if your credit card limit is ten thousand dollars and you've currently spent nine thousand then that is extremely high because that's actually ninety percent of your credit utilization and technically speaking you really only want to be below 30 percent of your credit utilization so if you have a 10 000 limit you really want to be spending about 3 000 or less every single month because that will actually help your credit score now if you're above 30 percent like in this example if you're using 90 of that total limit then that's really going to hurt your credit score and so by carrying a high balance it can tremendously hurt your credit score and that's obviously something that can hurt you because if you're looking for loans and different things like that obviously the higher the credit score the better the rates the better the loans and the more chances of approval so just always make sure to keep a low balance and try to keep your utilization below 30 because this data is actually tracked every single month so one month your credit score might go a little bit higher another month it might go a little bit lower but on average if you just try to keep it below 30 percent then you're always going to be helping your credit score rather than hurting it now the next reason your credit card might end up getting you into trouble is if you justify emergencies with your credit card.

so, for example, you just think to yourself if there's ever a problem I'll use my credit card, and then we'll figure it out from there this isn't a good way to be thinking because emergencies are always going to happen in your life and random expenses are going to show up as well like for instance, your car might break down and then you have a 3,000 expense that is technically an emergency but this isn't the kind of thing that you want to end up putting on your credit card because they're so expensive as far as interest is concerned so the best advice I have is to set up an emergency fund aside from your credit card and don't justify in the back of your head that if there's an emergency you can always use your credit card.

i want you to have an emergency fund for those specific scenarios now another reason you should stop using your credit card is if you end up making late payments because not only do you have a penalty apr that goes up tremendously and it's going to cost you a lot more in interest but it can also really hurt your credit score because if you're over 30 days late with your credit card those late payments show up on your credit score for a very long time and if you're 60 days past due it's even worse for your credit score so please don't make any late payments and if you're susceptible to making late payments then i probably would just avoid credit cards because the last thing you want to do is make a late payment and have it hurt your credit score even more all because you had a credit card in the first place so at the end of the day you really just want to be responsible with your credit card and make sure that you pay off that statement balance every single month in full by the due date so that you never even have to pay any interest and you really don't have to pay attention to late fees anything like that because you're always on top of your bills now if you guys want to see more credit card article. thank you for visiting this one have a great day.

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