Due to the advancement of technology, every sector of the industries is booming and financial is nothing exceptional. Today, people can easily go out anywhere by carrying minimum cash with them. All this is made possible because of the introduction of credit and debit cards in our life. Well, the amount of money available in a debit card account is what you actually owe but in credit card, you don’t actually owe the money and you will have to return the money that you spend.
Signs to Avoid Credit Card
So, a credit card is more than just a plastic card as it paves the way of endless possibilities where you are entitled to purchase anything that you wish for. Well, this might sound very fascinating but it is the source of all financial evils and you can end up in massive debt in no time if left in the wrong hands. Well, it doesn’t mean that credit card is completely bad as it also has some its good sides such as you can earn credit card rewards, protect from any kind of fraudulent activities and also help you to boost your credit score which can make you more creditworthy in front of the lenders.
However, a credit card can be extremely dangerous if you keep using it even for the smallest of payments and get into some serious debt which can totally ruin your financial stability. Thus, one should know first whether he/she is compatible to use a credit card or not first. Here in this blog, we have mentioned few signs that suggest you should stay away from the credit card for the time being. Now, let us get started.
Sign#1: Budget is not in your dictionary
The first and the biggest sign that you are not yet ready to use a credit card is if you don’t follow a budget. If you don’t have practice a better money strategy where you have a clear idea of how much money enters and leave your pocket every month, then using a credit card might be really a bad idea for you. Not having a budget makes you spend your money blindly without being cautious and having a financial tool that allows you to make purchase whatever you wish like can prove to be a great threat to your financial stability. Thus, it is better that you stick only to cash in such a scenario as it will keep giving you reality check how much exactly money is left in your pocket.
Sign#2: You have multiple debts to deal with
There is no point in going with credit cards when you already have too many debts to deal with. You should first try to get rid of all your debt and then after that, you can apply for a credit card in order to build your credit score. Meanwhile, when you have just started with your credit clearing process, you could apply for loans for bad credit no guarantor from a reputed lender. You can use the fund to clear your high-interest debt and will also help in building your credit score. After that, when you have cleared your majority of debt, then you can start using credit card later.
Sign#3: You are an impulsive shopper
If you are an addictive shopper who heads towards the mall by seeing the word “SALE” on banners to make sure that you get your hands on all the clothes available, then having a credit card can fuel your discretionary spending habits. Having a credit card might help you get all the things that you desire to have in your wardrobe but at the same time, you will end up getting yourself in a big amount of debt that needs to be paid back.
Sign#4: You are barely paying bills on time
If you are struggling to pay your bills on time and mostly you are making a late payment, then using a new credit card might just add on to your burden. Remember that credit card bills are not similar to that of the typical bills and you will be charged a hefty fee if you keep delaying the payment. The interest rate of credit cards is very high so the more you will delay; the bigger will the amount get.
Wrapping up, a credit card is helpful only if you know how to use it in the right way. If you witness any of these signs, then it is better that you drop the plan of getting a new credit card for the time being.