Money Is Awfully Easy To Squander With Credit Cards

Category: Finance, Credit.

Credit cards allow us to pay for things the cashless way and do it by an easy credit. Here are a few of them.

They bring a lot of simplicity to our lives but credit cards have their own drawbacks. High interest rates. The APR's for purchase, cash advance etc, balance transfer. are very high and skyrocket if you miss on few payments. By far the biggest drawback of credit cards is the high cost of loan. These interest rates make the actual cost of any purchase higher because of the high interest rate component. Easy to spend. So, the money with credit card is easy money but at a very high interest rate.

Money is awfully easy to squander with credit cards. This ease and the fact that credit card companies encourage spending with lucrative discounts, cashback etc. can drive a credit card holder into buying frenzy, which can drastically increase the credit card debt. Just a swipe and its done. Missing on repayments is costly. Things like slapping of a full late payment fee even if a credit card holder misses the repayment by a day, revoking the rewards instantly, applying high APR rates instead of low introductory rates are not uncommon. Credit card companies severely penalize late payments. Besides, costing financially the default on repayments can also blemish the credit report, which has very serious repercussions on the financial future of an individual.

Though, the credit cards by themselves do not have these disadvantages, it is the misuse of credit cards which cause the trouble. These three disadvantages can easily jeopardize the benefits of any credit card. Take care to repay your outstanding balances on time and don' t go on impulsive buying with your credit card. Secondly, it is always advisable to shop around before settling for any particular credit cards, the idea is to get a credit card, which has relatively low interest rates and other fees. This will save a lot in terms of money and reputation. If, during the use of credit cards the APR's become unmanageable simply try to transfer your balances to a new low rate credit card.

Last but not the least, never take cash advance using your credit card. Having a good credit history will always help get a balance tranfer with ease. The APR's rate shoot through the roof when you do so and this is a very very costly way to get cash.