Credit Card Two Reasons Why Using Credit Cards Increase Bad Debts

Good-Guy

VIP Contributor
We all use some sort of payment methods in order to transfer money or pay people. Most of us also use some sort of payment processors to receive payments from merchants online. There are various forms of payment methods, but one of the biggest and the most popular payment method is credit card. Millions of people around the world use credit cards and it is believed that credit cards is the best payment option for all the people. However, this is not true in most cases. Actually there are a few disadvantages of using credit cards.

Credit Card Leads To Unnecessary Buying Of Items

Credit cards give the option to the user to buy things now and pay for them later. This leads many people to make more purchase of items they may never need. By the passage of time, the user actually end up in big debts. We may not realize this initially, but when the bank issues credit statements, the user usually gets shocked when he or she finds that they have spent money in an excessive way.

High Interest rates Are Charged On Credit Card Purchases


Since the bank allows you to buy items on credit, they charge heavy amounts of interest on each purchase. This is something we all know, However, what many people do not know is the fact that the bank actually increases the interest rate annually and many people fail to pay back the money on time. This leads to extra charges penalty on interest. These were some of the main reasons why people should refrain from using credit cards.
 
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Deleted member 28127

Guest
This is mainly related to website accepted payment method while some sites accepts only international credit card so you use airtm to checkout.
 

Good-Guy

VIP Contributor
This is mainly related to website accepted payment method while some sites accepts only international credit card so you use airtm to checkout.

Unfortunately, many websites only accept credit cards as their payment methods. However, the websites that offer credit cards also have the option of paying through debit card. You can check with the website and see if they support American Express, Visa card, or master card as their payment option and ask the website if they accept debit cards instead. Using debit card will drastically reduce your chances of getting further into debt. This is why debit cards are far much better than credit cards, according to me.
 

Caramelle

Active member
Credit cards have their benefits, too, but it takes discipline to avoid drowning in credit card debts. Most credit cards offer perks on points accumulated from their usage. They offer cash back, miles credit, and various reward items that you can enjoy by simply using the credit card to purchase the items that you would normally buy in cash. You don't get charged for interest if you pay the total amount due in full. However, some people regard credit cards as their own money and use them to buy stuff that they cannot afford to pay. They end up paying only the minimum amount due every billing cycle. In time, they may not even be able to pay the minimum amount.

Credit cards can be useful for financially mature people but it is best to avoid them if you know that you will be using them to cover expenses and luxuries that your income can't support.

 
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eldavis

Guest
Though this is true, you can easily spend more than what you have planned for while using a credit card, especially if you are shopping online, it becomes alot easier, but I think it all boils down to discipline. If you can discipline yourself then it would better. Know when to shop and most importantly when to stop, the problem with most persons is that they do not know when to stop. Have list of the things you would want to buy, which are your needs and not your wants.
 

goodmoneygoodlife

New member
Sure, credit cards are vectors to increase bad debts. But basic discipline and planning (AKA you pay off your credit card twice a month, and don't buy what you don't need) can lead to really great rewards with credit cards.

For example, I haven't ever been late in paying my credit card bills because it's on autopay, and I pay mid-month manually as well. The benefits include:
1. 800+ credit score = great financing if I need to buy a house
2. Tons of credit card points = free plane tickets/hotel stays = free vacations = massive savings on the most expensive activity you'll do this year.

And I haven't paid a single penny in interest ever since I've started using a credit card as a high school sr. Just spend on your credit card what you would have spent in cash and you win.
 
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