Everyone is using a credit card and you’re getting a lot of attractive offers from credit card issuers, is that enough reason to go for a credit card? Do you really need it and can you meet up with the challenges that come with it? You might have a need to build a credit score for record purposes but if you’re struggling with any of the situations below, these are reasons not to get a credit card.
Reasons Not To Get a Credit Card
You Already Have Enough Debt
If you already have monthly debt payments well into the hundreds, it doesn’t make good financial sense to take on extra monthly bills. People with student loan debts, mortgage or auto loan debt need to forgo credit cards until they’ve reduced their current debt obligations.
You Think You May Overspend
- People with bad spending habits put themselves at risk of serious financial trouble by getting a credit card. Studies have shown that people spend more with credit than with cash. If you already know you have a tendency to go overboard with spending, it’s wiser to hold off on getting a credit card rather than get into debt troubles.
You Don’t Have Enough Income to Pay Off a Credit Card Balance
If you only work seasonally, part-time, or not at all, you may not have enough money to pay a credit card balance. Getting a credit card without enough money to pay the bill can lead to debt troubles. So, you will end up ruining your credit score instead of building good credit as intended.
You Don’t Understand Credit Cards Enough Yet | Reasons Not To Get A Credit Card
When you have no experience with credit cards, you can easily assume that using a credit card is very easy. You might even mistake it for a debit card. There’s a lot more to using a credit card correctly than swiping it for purchases. Though this is not such a big deal as there are tons of information on the internet that can break down how credit cards work and how to use them wisely. Once you understand it, you’re in a better position to get a credit card and use it responsibly.
You Don’t Want to Pay Interest on Your Purchases
There is a way to use credit without paying interest – by paying your balance in full each month. It takes a lot of self-discipline not only to pay off your entire balance month after month but also to ensure that you keep your spending at a level you can pay off.
Plus, even if you intend to pay your balance in full each month, there’s always a risk that something prevents you from doing that. If you never have a credit card, you never run that risk.
Can I do without a Credit Card?
Surviving without a credit card at a time when electronic payments are taking over can be difficult, but there are some alternatives. You can use a debit card, which is tied to your checking account, in nearly every transaction where you’d otherwise use a credit card. A prepaid debit card, similar to a debit card but without a checking account, is another option, but with high fees at times.
Renting a car or reserving a hotel can be more difficult with debit and prepaid cards. You may have to pay a higher security deposit or provide additional documentation. Check with the merchant prior to your reservation to find out what’s required based on your payment method.