Credit cards have often been projected as a financial back-up for people reeling under severe cash crises. Cash-rich individuals find credit cards helpful because they don’t have to fear carrying excess cash all the time. Moreover, it’s fine for them to repay the balance amount with high-interest rates for the luxury of going cashless.
The situation is opposite for individuals who opt for a credit card to meet their daily needs because using it can pile up the already existing financial hurdles with no way out but succumb to the pressure of repaying the debts. Here are a few ways of avoiding credit cards for the good:
Lack of an emergency fund
You are tempted to use a credit card mainly due to lack of an emergency fund, increasing debts, and inability to meet the expenses on a daily basis. The idea might look convincing when everything is taken care of at breakneck speed. The trouble starts the moment it creates large debts and the already stretched budget makes it impossible for you to catch up. Instead, switch to payment apps that help you in taking care of your expenses with interest-free rates.
Failing to plan is planning to fail
You can never have a plan in place to pay off your credit card debts because it is entirely dependent on two factors, how much you have and how much you earn. Let’s assume you have a credit card, during an economic recession, if you’re jobless then the first priority is to secure the funds, if any, making it obvious that you run out of options and survival is the only motto of life.
So, what about the debts that are lying in front of you due to the credit cards? You are trapped!
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Using credit to buy expensive items is an ‘illusion’
Credit cards allure you to afford the luxury which is as good as an illusion. In a lay man’s language, you think it exists but in reality, it doesn’t that’s why we call it an ‘illusion’. The possibility to purchase something costly is an illusion and the debts due to this event are the reality. Do you want to live in an illusion or reality?
Incurring debt and the loss simultaneously to maintain your lifestyle is an unwise decision in the long run.
Accumulation of Past due accounts
When you have a credit card and are past due then probably it’s the beginning of an unfortunate financial worry that is preventing you from making payments. Higher the past dues, farther it is to return to normalcy as additional fees start piling up. The aim to overcome your current backlogs means it should not lead to any extra debts but once you begin to use credit cards it grows into a full-fledged bad debt.
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After Effects of Maxing out credit cards
On reaching the maximum of a credit card it is assumed that the debt has set in but that’s incorrect, you’re already in it. The solution is to pay off all the outstanding debt and abandon the idea of using a credit card forever. For years, credit cards have been marketed as a reliable alternative financial option and it’s true considering only the wealthy can fit into it while the others, for now, can stay away and shun it indefinitely!
