The Risks of using Credit Cards


The Risks of using Credit Cards 

Some of the same benefits of using credit cards can quickly turn into risks if you are not careful.

1. If you do not watch your credit you could be forced to pay higher interest rates - If you have issues with your credit you will likely have higher interest rates. If you can not control your spending and continue to run up your credit cards you could end up in deeper debt. If you do not feel able to control your spending and your credit is poor, you may be better off giving up the credit cards for cash.
2. Can tempt people into purchasing things they can not afford - Sometimes having a credit card in your wallet can tempt you to buy things that you can't afford. If you are someone who can not say no to purchases then again, credit cards may not be for you until you gain control of your spending.
3. If you build up a higher balance it can seem impossible to get out from under it. - One of the biggest danger with credit cards is getting into a situation where your minimum payments are all you can afford. In this case it will take you a long time to pay off your cards.
Minimizing the Risks 
Lowering the Risks with Credit Cards requires that you have self control and use good judgment. If you find yourself out of control it might be best to stop using the cards until you gain control.

1. Keep track of your balance
Keep track of your balance

 - Watch your balance like a hawk. One really good way to keep track of your purchases, is to use a small notebook to write down all your purchases. Keep track of your balance so you know what it is before and after every purchase. Being forced to look at your potential balance due can put things into perspective when deciding if you really want to make a purchase.
2. Live beneath your means 
Live beneath your means
- If you think you can afford a certain amount, spend less than that. Eventually you will have extra money in the bank and you won't have to worry about having credit card balances. Generally if you do not have enough money to pay the bill right then, you should not make the purchase, unless you are buying something extremely necessary like medication or basic food.

3. Don't use Credit Cards for impulse purchases

Don't use Credit Cards for impulse purchases

 - Resist the temptation to use Credit Cards to buy something that you would not consider paying cash for. If something cost's $200. Ask yourself if you would be willing to write a check or pay cash for that amount. If the answer is no, then do not make the purchase.
4. Pay off balances even if it hurts - If you do find yourself with a balance. Make the largest payments you can afford and curb your spending until they are paid off.


by Becky Brooks

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