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The five types of people who shouldn’t use credit cards

The five types of people who shouldn’t use credit cards

December 13, 2016
people who shouldn't use credit cards
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Credit cards should not be used by everyone. They’re useful financial tools and they can be very helpful, but they can also cause a lot of harm. If you’re not careful and if you have the wrong spending habits, your credit card can very easily destroy your finances. This is why some people should stay away from plastic. But who are these people? We looked at the data and put together a list of the types of people who shouldn’t use credit cards.

Here they are:

People who don’t like budgets

If you don’t have a budget and if you intend to never use one, then you should definitely stay away from credit cards. People don’t realise it, but credit cards are extremely easy to use. They let you buy things. They let you spend. And this is very easy, since you’re not using your own money.

But here’s the problem. You may not be using your own money when you do the shopping, but you still have to pay off what you owe. If you have no idea of how much you’re spending and if you don’t know how much you afford to spend, a credit card can cause a lot of trouble. Serious debt is just around the corner

Compulsive shoppers

So you like to buy stuff. That’s not really a problem, as long as you know when to stop. But if you don’t know when to stop, then maybe you should just leave your credit card at home each time you leave the house.

When people shop with cash, they feel the money leaving their hands and their wallets. Most of the time, this helps stop the impulse to buy even more things. With a credit card, you never see or feel the money leaving your wallet. There’s nothing to stop you to buy even more. And, when you reach this point, you’re just holding a door open and asking debt to come inside.

People living paycheck-to-paycheck

If you’re living paycheck-to-paycheck, don’t get a credit card. It’s too dangerous. All you need is for bad luck to hit you once, and you could end up broke and in debt. Losing your job, health problems, a slow month at work, just one of these is enough to push you over the edge.

People who can’t pay their bills on time

If bills give you a hard time, a new credit card will make things even worse. Just one missed payment is enough to trigger late fees and penalty APRs. And if you keep making late payments, you’ll pay even more in interest and late fees. Your finances won’t like it at all.

People already in debt

This probably goes without saying. If you’re in debt, the best thing to do is to get rid of it, not accumulate even more. Not only should you not get a new credit card, but, if you’re using one now, you should destroy it as soon as possible. Get rid of that credit card and start paying off your debt! Afterwards, try to change your spending habits and to be more responsible. And only after that should you even think about getting a new credit card.

Thomas Hookton

Thomas Hookton is a finance journalist, history buff and science fiction connoisseur. Hit him up via email.

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