The United States and other leading nations in the world are getting apprehensive about the rising credit card debt problems such that many economic experts are looking closely whether the use of credit cards is a boon or bane to the individual card holders. Credit cards per se are neither good nor bad but there are a number of factors when using them that largely affect the management of personal finances.
The Importance of Credit Cards
The advertising campaign of card companies has been very successful in convincing people that credit cards are absolute necessities and that “you can’t leave home without it.” Actually, there are certain advantages in having a credit card, but there are more pitfalls you can easily fall into if you’re not sensible enough.
Not many people realize that when you use credit cards for your purchases or to pay for utilities or other bills, you are in fact incurring higher costs. This is 신용카드현금화 true even if you always pay your card bills on their due dates. And if you fail to pay on time, you are slapped penalties on top of the interests that you must pay.
Credit cards can be handy in providing financial support in cases of emergency. They can also provide you financial security when traveling. However, those with meager monthly income may find it difficult to pay even just the interests. Then, there is the factor of misuse. People with credit cards hardly pause to think if they can really afford or need the item they want to buy. This often leads to card holders amassing credit card debt beyond anyone’s imagination.
Choosing between Cash or Credit Card Transactions
Creating and following a strict budget plan is a vital aspect of prudent financial management. However, this concept is often overlooked by the growing dependence on credit cards for most purchases. As a result, some individuals can’t easily decide if they’re better off buying in cash or using their card. If you still can’t make up your mind, read on to find out more.
Try to recall the last time you made a sizable cash purchase. Didn’t you agonize for a while about parting with your hard-earned cash, thinking long and hard if the item or service you’re buying is really needed and worth it? This emotional attachment to money helps people in making more responsible financial decisions but is definitely absent in credit card purchases. There is the tendency to buy anything and everything without remorse when using credit cards. Moreover, a purchase on credit is usually 12% to 18% higher than the cash price. Can you imagine the sum of your potential savings if you were to buy mostly in cash?
When Teenagers Use Credit Cards
Nowadays, credit card companies are directing their adverts to the teen market. However, this does not bode well for parents more so if you are training your kids to become more financially responsible. By nature, teenagers can be impulsive and if they have credit cards, they can think that they can have just about anything they want. The best way is the traditional way of making them earn enough money to buy what they want.
You must realize that credit cards will not give you the financial security you have been dreaming of. Instead, they will only tempt you to rake up more credit card debt than you can afford to pay. If you think you still need one despite the risks, exert all efforts to spend more wisely. While most credit card holders would like to believe that they are enjoying countless benefits with the use of plastic money, they will have to face the sad truth one day