Reasons to Stop Using Credit Cards to Save Your Hard Earned Money: Credit cards are one of the easiest modes of payment. You can take advantage of multiple rewards, interest-free loans and free cash if you use it properly. Credit cards can be used to organize receipts for purposes of tax.
However, if you buy more than your credit card limit, you end up paying more fees than you can afford to pay when the bill arrives, which can turn into a debt trap, which could also be a key factor in your expenditures. Increases your spending limits and stifles your savings.
Hence, if credit cards are used improperly, this is the biggest reason that you are not able to make savings. If you are aiming to save money, you should first fully stop using it to prevent the debt on your credit card from rising. Here, we’ll summarize the reasons why you should stop using credit cards now to save your money.
As credit cards are easy to use, that also makes it easier to spend more. It is obvious people tend to spend more while using a credit card compared to paying with cash.
2. Hidden terms and conditions
You would probably be stunned at how many aspects of using a credit card you are unaware of if you actually read the terms and conditions when applying for a credit card. Where it is very clearly stated that the credit card company can increase the interest rate, fees and penalties at any time.
3. High rate of interest
If your billing due date passes without paying your balance in full, the amount is carried forward and interest is added. This interest gets accumulated over time on purchases made after the interest-free period. The average interest rate on credit cards is often higher. So, if you’re unable to make payments on time each month, you could end up paying hundreds or thousands more in interest than you originally charged.
4. Repression of self-control with credit cards
By refusing to attempt financial control, you may lose financial security. At worst, having a mindset of impulsive purchasing can negatively impact other areas of your life, such as your drug or alcohol use, and interpersonal relationships. However, practising patience can be challenging, but it also has many benefits, such as improving the ability to reach financial objectives such as home ownership, or you may make the savings you had planned.
Overall, using credit has a negative effect on the willingness to save money, especially if you lack self-control. If you feel that saving money is getting challenging with credit cards, following these tips and tricks, you may find them workable. These simple steps are listed below:
- Don’t keep your cards in your wallet; instead, leave them at home.
- If you do need to use them in an emergency, make sure to pay the full balance right away to avoid accruing interest.
- Operating a debit card, which deducts money from your bank account to fund the purchase, is an additional choice.
- One phone call to the issuer will deactivate your credit card. It will prevent you from making impulsive purchases with it.
- It is better to cancel your credit card and experience a temporary credit setback than to continue piling up debt while trying to maintain your credit score.
- To avoid increasing your debt, you should only use your own money.