Credit cards should not be used by these people; Are you one of them?


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Credit cards should not be used by these people; Are you one of them?

In times of a financial crisis, credit cards turn out to be quite useful. They can at the same time, however, become dreadful if not taken care of properly and used recklessly. With rolling credit, not paying the dues on time or clearing only the minimum amount every month can land the credit card user in a debt trap. This not only ruins the credit score of the cardholder but also becomes hard to come out of a debt trap as such.

Hence, experts say people should be extremely cautious while using credit cards. Also, people with low money management skills or who are reckless with their finances can look at using debit or prepaid cards instead of credit cards.

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Here is a list of types of people who should avoid using a credit card. Find out if you are one of them:

Over spenders
People who overspend their money or spend their money extravagantly, should not hold a credit card as they might fall prey to huge debt. People with high spending pattern mostly exceed the limit of their card very fast. Hence, experts suggest credit hungry people should avoid using a credit card as overspending from their card will also reduce their credit score. This way if they apply for a loan in the future, there’s a high chance that their application would get rejected.

Funds everyday expenses
Credit cards attract high-interest rates, which generally range between 3 and 4 per cent per month, which is 36 to 48 per cent annually. If you use a credit card to fund everyday expenses, you might fall into the trap of revolving credit and have long-term debt problems.

Has multiple sources of credit
If you have multiple sources of credit, getting an additional credit card might not be necessary for you.

Multiple credits can be in the form of various personal loan accounts, other credit cards, etc. Having too many sources of credit can accumulate debt over a time period, which will impact your credit score and you can end up being rejected by lenders in the future.

Who don’t pay bills on time
People who most often delay or miss their bill payments should also not hold a credit card. It becomes risky for them because once the payment deadline is over, a high rate of interest in addition to the penalty for missing the payment is charged to the credit card. This way the due amount keeps increasing over time. Not only that, but it also reflects poorly on the cardholder’s credit report.

Revolving credit
Some people believe that paying the minimum amount due will make them stay clear of attracting additional charges. But that is not true. Even if you clear the minimum amount due on time and keep revolving, your credit account interest will be added to your account. To avoid additional charges overall, you need to clear the entire dues before the due date.

Forgetful persons
People who are not safe with their possessions and are careless in handling cards should also not possess one. Especially, with online and digital frauds on the rise, losing a credit card or disclosing PIN numbers can lead to massive and unimaginable losses.

Doesn’t use the card
These are the opposite of people who overspend. In addition to overspending, hardly using a credit card ruins its purpose. Credit cards come with a lot of benefits and attract rewards and discounts. People who don’t swipe the card at all do not utilize their cards to the fullest.

 

Source:- yahoo

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