Reasons to Avoid Credit Cards

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » Reasons to Avoid Credit Cards

Reasons to Avoid Credit Cards

Reasons to Avoid Credit Cards
August
21

There have been so many articles on the way one can use his or her credit card. With today's state of the credit card industry it is little wonder that certain individuals can't imagine living without plastic. From car rentals to shopping for groceries, credit cards can be used virtually anywhere. However, there are some cases when one should avoid using plastic money.

To begin with, let's go over the basic features of a credit card. A lot of credit cards on the market offer introductory period. However, this period only lasts for 6 to 12 months, after which you will be charged with interest on your balance. It is also called APR for purchases. But this is not the only rate you will face when dealing with credit cards.

If you think that withdrawing cash at the ATM using your credit card is a good idea, think twice. Read the terms and rules of your credit card applications carefully. You will be often provided with a table of APRs. Cash advance rate is the reason you should avoid withdrawing cash off your credit card.

For every cash withdrawing transaction that you make, a rate of more than 20 percent will be applied to the sum you take out of the ATM. In addition, some credit card issuers also charge a fee that is not related to the amount you withdraw. Making small withdrawals can actually cost you double the amount of cash you got on your hands.

A wise thing to do when craving for paper money is to use a debit or ATM card. Those have no or little fees once used at the money dispending machine. If for some reason you don't own such cards, your best bet is to withdraw cash at your bank, or any other bank for that matter. However, keep in mind, that other banks will often charge you a withdrawal fee.

In any case, if you find yourself in the middle of nowhere, with no signs of banking facilities, except ATMs and there is an emergency situation, go ahead and use that plastic credit of yours. But be wise when entering the desired sum. You don't want to end up paying cash advance fees twice.

The next item in the list is the default rate. This interest rate applies as soon as the bank sees you as a risky customer. Default rate is usually applied once you miss one or two payments. If you find yourself in an unpleasant situation like this, it's time to find out where you went wrong. Think of what caused you to miss a payment and avoid using your credit card until you pay the balance you owe in full.

The worst thing about default rates is that they are universal. In other words, once one card issuer imposes default rate on your plastic, the other issuer will do the same, even if you've never missed a payment. Therefore, if you find yourself paying the default rates, it is time to consider other sources of funds.

Last but not least reason to avoid using credit cards depends on your lifestyle. If you find yourself having trouble managing finances or have little knowledge about credit, you will most probably end up in deep debt. Impulse buyers should also stay away from plastic. A lot of people with credit cards tend to think that they have easy access to money on their credit cards. But that access comes at a cost of interests and fees.

If you feel that credit card is not your option, don't think that you will not be able to enjoy all the services that require plastic. There are tons of credit card applications for prepaid and secured cards. Such cards require deposit made that also represents your credit limit. So, be rational about choosing methods of payments and don't let credit debt eat out your savings.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Spring 2018 – Expert Choice

Top 5 Cards for Travel from Our Partners: Spring 2018 – Expert Choice

Posted: February 12, 2018

Days are getting longer, snow is melting and you already feel the lightest breath of warm breeze on your face - spring is here. Summer holidays are looming, and so is Easter with its shopping. You can lift in spirits and let CreditLand ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!