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10 Reasons Not to Get a Credit Card

Updated on May 5, 2017
There are many reasons not to get a credit card, including high interest rates, excessive charges, and the risk of creating a debt spiral that you can't escape from.  This article aims to list and detail the main downsides.
There are many reasons not to get a credit card, including high interest rates, excessive charges, and the risk of creating a debt spiral that you can't escape from. This article aims to list and detail the main downsides. | Source

With credit so readily available nowadays, and credit cards being advertised and promoted as a convenient way to shop and spend, getting one or more cards is a temptation that most find hard to resist.

There are many downsides to credit cards, however. The main basis of them is that the credit companies make their money from users making financial mistakes.

Many people struggle to avoid spending beyond their budget, and with the discipline involved with monitoring and paying off their debts.

I list the main reasons below why you should think twice before getting one.

1. Costs. They are an expensive way of borrowing money. Interest rates on credit cards are usually very high compared with other methods of borrowing, such as taking out a personal loan. Added to that are all sorts of other costs and fees that the credit card company adds on.

Why don't we call on the credit card companies to be accountable? They need to be held accountable for their predatory lending practices.

— Paul Wellstone
Unscrupulous people can use credit cards to access users' personal details and financial information.  Using credits cards means always being aware of this and keeping track of statements and bank balances.
Unscrupulous people can use credit cards to access users' personal details and financial information. Using credits cards means always being aware of this and keeping track of statements and bank balances. | Source

2. Fraud. As with all electronic methods of payment, you can can be defrauded by unscrupulous people out for financial or material gain, or your card can be employed as a tool for identity theft.

3. Credit ratings. Many people get credit cards with the aim of building their credit rating. Ratings only improve if all the payments made are big enough and paid on time. If your earnings fall for some reason and the payments aren't kept up, a user's credit rating goes downhill rapidly causing all sorts of problems.

"High bankruptcy rates, increased credit card debt, and identity theft make it imperative that all of us take an active role in providing financial and economic education during all stages of one's life."

— Ruben Hinojosa
Not everyone has a personality compatible with the financial discipline needed to use a credit card.  Spending beyond your budget is extremely tempting.  Monitoring your spending is time-consuming.  Keeping up with statements and dates is no fun.
Not everyone has a personality compatible with the financial discipline needed to use a credit card. Spending beyond your budget is extremely tempting. Monitoring your spending is time-consuming. Keeping up with statements and dates is no fun. | Source

4. Discipline and debt. It takes a lot of financial discipline to use credit cards. Care must be taken not to overspend, even when there are temptations to do so. Spending needs to be monitored, statements read, balances paid off. Failure to do these things can lead to serious debt problems.

5. False promises. Price deals, points, and cashback deals obtained by using them often aren’t so great when charges and interest payments are added into the equation.

"Social security, bank account, and credit card numbers aren't just data. In the wrong hands they can wipe out someone's life savings, wreck their credit and cause financial ruin."

— Melissa Bean
Managing a credit card is not easy.  There is a temptation to spend beyond your budget.  Monitoring your statements and payments regularly also takes a lot of effort and discipline, especially if you have multiple credit cards.
Managing a credit card is not easy. There is a temptation to spend beyond your budget. Monitoring your statements and payments regularly also takes a lot of effort and discipline, especially if you have multiple credit cards. | Source

6. Card management is difficult. Keeping track of all your debts and payments can become a major issue, especially if users have multiple cards. Three cards means three lots of statements and payment deadlines to deal with each month. With money coming in and out all the time, it can easily become confusing.

7. Too easy. Although credit cards are undoubtedly convenient, they are too easy in some circumstances. The fact that they are often so easy to obtain and use means that users often don’t explore all their options - taking out a loan might be cheaper and more appropriate, for instance. The ease of use can also have negative financial consequences for people who have issues with impulsive behavior.

What Wall Street and credit card companies are doing is really not much different from what gangsters and loan sharks do who make predatory loans. While the bankers wear three-piece suits and don't break the knee caps of those who can't pay back, they still are destroying people's lives.

— Bernie Sanders
Being in debt is stressful for many people, and credit cards are no exception.  Some people prefer the peace of mind of not having a credit card rather than all the anxiety and fretting than can involved with them.
Being in debt is stressful for many people, and credit cards are no exception. Some people prefer the peace of mind of not having a credit card rather than all the anxiety and fretting than can involved with them. | Source

8. Stress. Owing money is in itself stressful for many people. It can cause anxiety, anger, and even mental illnesses such as depression in extreme cases. There is peace of mind in not having to worry about all your debts and how you are going to pay them off each month.

9. Deceptive minimum payments. Credit companies make their money mainly from users making financial mistakes. Sure, they want you to pay off your debt, but they also want you to hold on to your debt for as long as possible. Minimum payments are set very low, often only 2% to 4% of what you actually owe, so that you pay more interest over time.

It is imperative that we make consumers more aware of the long-term effects of their financial decisions, particularly in managing their credit card debt, so that they can avoid financial pitfalls that may lead to bankruptcy.

— Daniel Akaka
Credit cards are often promoted for their convenience, especially for travel purposes.  Many companies charge the user large fees, however, making them an expensive way to spend money abroad and a less desirable method for making purchases.
Credit cards are often promoted for their convenience, especially for travel purposes. Many companies charge the user large fees, however, making them an expensive way to spend money abroad and a less desirable method for making purchases. | Source

10. Foreign Transaction Fees. International travelers often discover to their detriment that many credit cards charge foreign transaction fees for the use of credit cards outside of the U.S. The fees can be as high as 3%, making it a costly way to spend in other countries.

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