Credit cards can be an excellent tool for those who use it responsibly.
Many people, including myself, earn $1000s of dollars in rewards each year through the use of credit cards. Many companies manage their cash flow responsibly only through the use of credit cards. It can be a tremendous financial tool if used properly.
Credit cards also come along with many benefits. For example: purchase protection, travel insurance, return protection, and many more. These benefits are all great to have as long as the credit cards are used responsibly.
Credit cards can also be a temporary bandage if you have a large expense and you want to be able to roll it for a few months through the use of 0% APR cards.
But on the other hand, there are many who have seen credit cards wreck financial disasters which took years and years to recover from. Credit cards, when not used responsibly, can become an extremely dangerous financial tool.
When to stay away
If you see that too often you cannot afford to pay the full balance at the end of the month, then stop! It’s time you take all your credit cards and cut them up! The game of credit cards is not for you. The smartest thing you can do is go straight back to your debit card immediately!
But how will I pay the grocery bill?
In my opinion, 0% APR cards are only good for a one-time large expense; should it be, god-forbid, a medical expense, or for good reasons, such as moving into a new home. A 0% APR card will allow you to pay the expense slowly over 18 to 21 months interest-free.
But if your day to day life expenses are more than your income, then 0% APR credit cards are not going to help. Pushing another few months is not solving the problem. A credit card does just the opposite; it makes the problem bigger.
If you cut up your credit card then you’ll be forced to face your problem and find a real solution.
You can’t afford your month? How about cutting your budget? Sit down and think, what are you spending on that can be cut out? And how about another income by doing a side job? Think of some of your old talents. Maybe you can start doing some web design on the side? Music lessons? Find a company that will hire you as a part-time bookkeeper, etc.
These are real financial solutions to get you to the other side of your financial hardships. Credit cards are not a solution. With credit cards, you’re only kicking the can down the road, which will end up kicking you right back in the face ten times stronger!
Credit without credit cards
Nowadays, the only proper way to build credit is by having credit cards. That’s why some people feel they must continue using their credit card, even though it’s causing them trouble.
It is true that you can only build proper credit through the use of credit cards. But instead of constantly having the credit card in your wallet, tempting you daily to use it, think about other ways to use it. Maybe set up one or two monthly recurring bills (like a phone bill, a membership, etc.) which your card will charge automatically. Then you can go and cut up the credit cards. You will continue building credit as your accounts will stay active, but at the same time, you won’t have the credit card challenge in your pocket daily.
Conclusion
Even though at Help Me Build Credit, we make our money by promoting credit cards, we want to give our readers a fair warning. Credit cards are not for everyone. If you feel that credit cards are causing you to swipe more, up to the point where you cannot afford your monthly bill anymore, then stop! Cut it up.
Remember! If you do not use credit cards properly, then no welcome bonus, rewards, or even a few months of 0% APR will be able to cover up the losses you will suffer from using credit cards.
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