Meet The Telltale Signs That You Might Be Better Off Without Your Credit Cards For The Time Being
Credits cards have seemingly become an indispensable part of modern life over the past decades. They make paying for products and services easier and simpler. What more, most credit providers give their clients many incentives, like credit points and miles, to ‘earn’ back something from simply just spending.
However, having credit cards may not be financially compatible with everybody, especially those who are still trying to learn how to manage their finances. Here are some telltale signs that you should probably take a break from using your credit cards.
Constant Missed Payments
Missing or being late with payments often comes with a penalty paid on top of the initial interest rate given to a cardholder. If you notice that, for whatever reason, you’re missing your payments, it might be time to reevaluate your readiness to regularly buy things on credit.
In the end, managing one or more cards takes diligence. Don’t feel bad about stopping for a while first to work on your overall financial management skills.
Only Affording the Minimum
The same advice goes for people who are only able to pay the minimum on their balance. Continuing to do so would only end up costing a cardholder more money in the long run. Never underestimate how quickly interest payments can add up in time.
In the end, one may just be spending more than they’re currently earning as their balance further grows. More importantly, don’t forget that a credit card is technically a small loan in itself.
Existing Mounting Debt
Speaking of loans, people currently saddled with other debts like student loans, car loans or a mortgage, might want to start using their credit cards sparingly, too. Financial experts advise against taking on more debts, especially when the ones they already slowly expand over time.
The same can also be said for those with a previous history of racking up debt balances or overspending. Think of credit cards as a financial tool that can either be used against or to one’s advantage, depending on a person’s sense of responsibility.
The Question of Interest Rates
Beware that some credit providers are betting on the fact that people don’t really know or care about the amount of interest that they are being charged. Be the opposite of this expectation and make sure to get a good idea of how much a credit card will charge throughout a year.
To do so, one can find out a card’s annual percentage rate (APR). This metric gives people a look at how much additional fees and balance interest rates come with availing a credit card.
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