10 Reasons Why You Should Avoid Credit Cards

Although it’s difficult to get a great loan, buy or lease a house without a credit card and get penalized for living within your means, there are way better reasons why you shouldn’t keep one. Not everyone is careful with their spending and you can block yourself from attaining certain things if you spend more than what you have. Even though it gets very tempting, it’s so easy to screw yourself over by getting credit cards.  So, this is why you should think otherwise…..

1. They can affect your credit score

Your credit score determines a lot more than what interest rate your mortgage will be. It will will affect how much you’ll pay for insurance. If you accumulate credit card debt and lower your credit rating, you can expect to pay significantly more money than those with good credit ratings.

2. They can come with universal default

Universal default states that if you make a financial mistake somewhere and it gets onto your credit card history, the credit company has the right to raise your interest rate to its highest level.

3. High Interest rates

Credit card companies charge interest rates on some cards that are more than double that rate. Interest is good when you are the one saving but an enemy when you are the one paying.

4. Brings numerous fees

Credit companies also make money on fees, if you make payments late expect a hefty late fee. If you go over your card limit, you have another fee added to your bill.

5. Many cards have a hidden rule in the fine print

The contract on the fine print favors the credit card company. You’ll find out that by signing it you have given up your right to take the credit card company to court for any dispute you may have.

6. Rewards Programs Aren’t that Great

Interest rates on these cards are usually higher than on non-reward credit cards, so if you carry a balance you are paying for those points or miles in higher interest charges.

7. It’s easier to overspend

When you pay using a credit card, you don’t feel the immediacy of the transaction the way you would when using cash, making it easier for you to overspend.

8. Too Convenient

Credit cards makes you not think through before purchasing or buying something you don’t necessarily need.

9. Deceiving minimum payments

Sometimes credit cards bills comes and a small payment is needed. This small payment will cost you in the long run. Credit cards set  the minimum payments low to extend the loan as long as possible meaning in turn you pay more interest.

10. Spending more than you have

Credit cards can cause a huge amount of financial damage. It’s important to understand how to avoid this damage before you apply for them. If you know you can’t resist the temptation to use them unwisely, then opt out and not get a credit card.