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10 Reasons why you should not use Credit Card

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Using plastic money or Credit Card is status symbol today. It seems we can’t imagine our life without a credit card. We go to Flipkart, Amazon and Snapdeal select the item and flash our credit card for shopping. At a shopping mall, we swipe our credit card with proud. It seems credit card is our best friend that allows us to purchase anything starting from the latest version of gadgets, trendy dresses or any other lifestyle living requirement. We are not worried about paying money till the next credit card statement arrives in the inbox. It is Easy, very easy right?

If it is easy for you probably you are living in fool’s paradise. Credit companies which issue credit card to you are here to make money and not for charity. They are earning a lot of money from you by means of hidden charges and interest rates. If you fail to pay money on time to Credit Card Company you will be part of the vicious circle of exorbitant interest rate which cost you very. So, it is better for you to understand credit card product before making impulsive buying using a credit card. Sharing personal experience I never use a credit card and here are 10 reasons why you should not use credit card.

Also read – Top 10 Best Credit Cards

10 Reasons why you should not use Credit Card

  1. Impulsive Buying – Use of Credit card is like an invitation to impulsive buying. You can’t stop yourself from buying excessive items. It seems it teaches you to spend beyond your limit and hence you should avoid using a credit card. It is advisable to prefer cash on delivery method.
  2. Interest rate – You need to remember the last date of credit card bill payment. If you fail in bill settlement you need to pay an exorbitant rate of interest up to 36% or above. If you are not ready to pay this interest from your hard earned money avoid the use of credit card.
  3. Reward points – Another reason for not using a credit card is reward point or bonus point strategy of credit card companies. It is a visible trap for anyone. When you think you have enough point for redemption you will end up taking items like a cheap wristwatch, goggles or a tie with the logo of the bank imprinted on it.  Once you receive this benefit you will be informed in the next cycle of a bill that as per the policy of the bank, your remaining points has lapsed.
  4. Annual Fees -Credit card brings an additional burden of paying annual fees and late penalty charges. You need to select your credit card carefully and you need to be aware of charges applicable with credit card usage. Don’t’ dare to be casual you may end up paying more money.
  5. Paper work – You need to save payment receipt and check them against your statement every month. It is additional paper work. This is to ensure that you are not overcharged by Credit Card Company.
  6. Credit card Loan – Credit card loan is another trap. Once you take credit card you may receive a number of calls from your issuer that you are eligible for an additional loan up to 1.5 lakh due to clean payment track record. These loans are offered with very high rate of interest and without prepayment option.
  7. Teaser Rate – Another danger with a credit card is bank can change rate of interest and terms and conditions any time. They can change your credit limit prior to any notice.
  8. Sharing Personal Information – You are sharing a lot of personal information with Credit Card Company. If database of Credit Card Company gets compromised you are at high risk.
  9. Blowing your budget – The biggest disadvantage of credit cards is that they encourage people to spend money that they don’t have. It may ruin your financial planning and may drag you in debt.
  10. Credit Card Fraud – Like, cash your credit card or credit card information can be stolen. If it is misused by hacker you are nowhere. You may need to pay money which you have not used.

Also Read – How to recover money if your debit card is hacked or misused?

Over to You –

A credit card can be a great tool if use wisely. On the other hand, unwise usage leads to a huge financial burden. If you decide to use a credit card, remember few tips given below for credit card usage.

  • Keep track of all your purchases. If possible, maintain all receipt of purchase.
  • Don’t get carry away by doing impulsive shopping.
  • Never miss credit card bill payment.
  • Don’t share your credit card information with anyone.

Hope you liked this article. Do share these useful tips about credit card usage with your friends.

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.