When to Avoid Using a Credit Card

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Every credit card should come with a warning label that reads “handle with care.” While credit cards are small and seemingly innocent pieces of plastic, if they are not used carefully, they can cause a lot of financial trouble if they are not used wisely. Unfortunately, there are too many people who use credit cards as a tool for purchasing items that are unobtainable otherwise.

When the credit card arrives, the bigger-ticket items, along with the small purchases, have to be paid for. It is also necessary to cover the interest fees that are eventually tacked on. It is possible to see more tweets about managing debt here or to keep reading to know when it is best to avoid using a credit card for purchases.

Down Payments

When someone is ready to buy a big-ticket item, such as a vehicle or a house, it is not a good idea to put the down payment on a credit card. After all, a person is sighing on for a payment plan that includes interest payments. If a card is used for this, a person will pay the down payment, along with all this interest. Instead of using a credit card for this, save up until cash can be used for the down payment.

Startup Business Costs

Trying to get a business off the ground and to a point where it is successful is something that can take several years. In some cases, a person will never achieve success. This represents a risk, so there is no point in getting in more financial danger by charging these initial costs.

A better option is to save up and get the cash needed to start the business. If it is impossible to get the cash needed, consider a small business loan. Usually, these loans provide much lower interest rates than a credit card.

Household Costs

If someone is unable to afford basic expenses, they will not be able to cover the additional interest fees that are going to add up month after month if they cannot pay the balance in full. When someone is in this situation, it is time to get creative and thrifty. Be sure to eliminate any non-essential expenses, such as dining out, gym memberships, and cable. Sell things that are not needed. It may even be a good idea to pick up additional shifts or get a side job if possible.

College Tuition

There is no reason to use a credit card if a person cannot meet their tuition obligations. In this situation, a person has options. In most cases, a school’s financial office can provide advice on low-interest scholarships, student loans, and other programs.

When someone is trying to cover the costs of big purchases, reaching for a credit card is tempting. However, this is something that needs to be avoided in many cases. Being informed is one of the best ways to ensure the desired results are achieved and that a person does not have to deal with more debt than they can handle.

 

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