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The Disadvantages of a Credit Card

When looking at the advantages of having a credit card it is very easy to overlook the disadvantages and the possibility of the spiraling costs of items compared to waiting and paying for them once you have saved enough money to pay outright. Here area few of the basic disadvantages.

With a credit card comes the interest payments. Unless you pay off the total amount of your credit card each month (and chances are you won’t) you will end up paying interest. This interest will mean that the cost of paying for items ends up being much more than they originally cost.

It is easier to buy on impulse. When you have the ability to pay for something there and then on the spot means that you are more likely to pay for something on your credit card. This means you are more likely to get into debt buying things that would normally be either too expensive or a luxury.

If you are late with your payments then you will pick up charges, the average late charge is $30 so imagine if you miss 3 payments by a day you will pick up $90 in charges. Doesn’t matter if you owe $5000 or $50 you will pick up the full charge so always pay on time!

Annual fees are very common with credit cards which again can push up the cost of paying for items without you even realizing. There are some transaction fees that you will encounter when buying certain items but this varies from card to card.

Basically be very careful when you are applying for a credit card make sure you weigh up all sides of the argument for getting one.

For more valuable debt relief and free financial planning advice try visiting Online Money Advice located at http://www.onlinemoneyadvice.net where you will quickly and easily find a wealth of information on debt consolidation, credit repair and credit counseling advice that will help you financially and give you peace of mind for the future.

Author: Steven Turner

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Date
August 21st, 2008

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mior111

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