You can search the internet that you will find various texts that treat credit card as the great villain of good financial education. Everyone has a reason, because it allows for purchases even without actually having the money available, leading to overspending and delinquency. But should you be afraid to use it?
Of course not. We have written several times here that if used correctly, the card can become a great ally.
But the issue we want to address here is about those people who have already developed a certain aversion to credit card use and who do not use it under any circumstances. Here are some beliefs of these kinds of people… and reasons for not believing them anymore.
1. I will pay you very high interest on the card
Yes, in part this is true. If you are unable to pay the full amount of the monthly invoice and have the appeal to install or delay payment, the interest charged will be stratospheric.
But this is what we might call the “worst case scenario” possible. It is as if we stop using the plane just because there could be a fatal accident.
The point is not to let your card spending be out of your budget. If this is strictly followed, there are great advantages to using the card.
2. Someone will “steal” my card and use it indefinitely
The risk of someone misusing your card, whether on the internet or even in the “physical world”, is a real one and you should take the necessary precautions to prevent it from happening.
But the chance of taking too much damage is slim, even if you fall victim to information theft. But for that, follow these two very important habits.
First, check your card statement on a regular basis to identify any expenses that are not yours as soon as possible. Many financial institutions send an SMS warning of all expenditures, which can greatly facilitate this verification.
Second, be sure to “insure” your card if it is available. Usually the amount to be paid is a very low monthly fee but it gives you greater security. Even so, you will still need to check and always advise the card carrier of any unauthorized expense.
3. The card will boost my consumer instinct
Yes, it is often difficult to resist a payment method like the card that allows you to spend without having to have money in your pocket! But eliminating the card just because of this “fear” is trying to eliminate the effects of using the card and not focusing on the cause of this issue.
It doesn’t matter if you pay by card, cash or by check… what matters is that you should always spend less than you get! This is the rule that will allow you to achieve financial balance. And this way all your spending can be done on the credit card.