“Don’t do it!” I remember my friend giving me one last warning, before I stepped to the other side, the side where the evil dangers of credits lurked. Ignoring her warning, and of several others’, I went ahead and applied for a credit card anyway. I didn’t understand the over reactions back then. It was after all, just a card, and not any different from my debit card. Years later, I sit here, hoping I had taken all the warnings seriously, and steered clear from it. As I still deal with the aftermath of it, let me explain why having a credit card is a terrible idea, and why you’re better off without it.
You spend more than you can afford to. Since the amount you spend doesn’t actually go from your pocket immediately, you’re tuned to think you aren’t spending much money. As a result, you end up spending much more than you can, or planned to, and end up going way over budget.
It is addictive. There’s an unexplainable joy that comes with going shopping, eating out and travelling, without spending any money, well, at least feeling like you’re not spending any money, and this joy is addictive. Despite the bills you pay when it’s due, this addiction puts you back in the same pattern of overspending, only to regret it later.
It rips off your savings. With the addiction that it is, there are high chances of you digging into your savings to end up paying bills that far surpassed your capability to pay. Worse, is when you fail to save anymore, because you’re stuck in a cycle of spending and paying enormous credit card bills, leaving nothing for your own important needs, let alone saving.
It gets you stuck in a cycle. What do you do when you’re out of money, because all you had, has been spent on paying the credit card bill, and you now need money to spend on other important things that cannot be ignored? You use your credit card again! How else will you pay for things when you’re out of money? This is a vicious cycle that will not stop anytime soon, and is highly difficult to get out of.
You pay more than you spend. On occasions where you pay just a part of your bill, enough to keep the pesky reminder calls at bay, you end up paying much more in interest, than the actual amount you spend. It’s also important to remember, that no matter how decisive you are about paying the total bill after postponing it once, there are very few chances of that happening. You’re already stuck in a cycle remember? Now add up the interest you’ll keep paying for months! Be aware that credit cards charge very high interest rates!
It makes you comfortable with debt. Debt of any kind, is best avoided. The very concept of a credit card, is purchase through debt. With constant usage of a debt-card, you end up becoming comfortable with the idea of debt, which soon seeps into debts of other kind, which can be alarmingly harmful in the long run.
It effects your financial decision making skills. You’re probably thinking, but I’m not like that! I will have an account of how much I spend and pay my bills on time. Sadly, this is how it all begins. Having a credit card at hand, and not end up becoming dependent on it, would be as rare as leaving a donut with a hungry child and not expecting him to eat it. There are bound to be slip-ups and times when your master plan of taking control over the card goes haywire, and poof! along with it goes the confidence you had in your financial decisions!
It will steal your peace of mind. This is probably the most serious aftermath of dealing with a credit card. When you have unending bills to pay and interest rates that eat into your bank account, a lack of helplessness is sure to prevail. More mental energy is spent on either dealing with the cycle of the credit card bills, or the aftermath of huge purchases, leaving you with sleepless nights, as you wonder was it all even worth it?
So when you find yourself tempted to get a credit card, ask yourself if you really need it. If you already have one (or more), do your finances a favour, and get rid of it!