Credit cards are a great convenience and offer many benefits to most people. There are, however, some people who should not have a credit card.
The reasons for this are simple. Those who are impulsive, irresponsible, careless or not financially stable should not use credit cards because these attributes can lead to a lot of financial troubles when credit cards are misused or abused. As a result a lot of debt is usually incurred and can cause a lot of headaches for the individual and have a ripple effect on the rest of society.
Here are a few top reasons why some people who are impulsive, irresponsible, careless or financially unstable should not have credit cards:
*Impulsive
Some people are impulsive shoppers and do not know how to shop within their income means. Usually the signs are an attitude of not worrying about expenses, and buying on a whim with little thought to consequences.
Individuals who are inclined to spend impulsively tend to live by the assumption bills can always be put off and paid later since credit card companies allow grace periods (usually averages about 25 days) and the ability to carry balances with making a minimum payment.
This treads into dangerous territory because those interest fees rack up quickly. Creditors count on the spontaneous nature and immediate gratification that those who are impulsive tend to be when they get anywhere near a store.
Those minimum payments don't usually touch the principle amount borrowed, especially in high credit card debt, and the balance never gets a chance to be paid down unless substantial amounts are paid that are not solely going to interest payments.
*Irresponsible
People who are not financially savvy and/or irresponsible with money should not use credit cards. The reasons for this are vast. There may be a level of immaturity, or not full understanding of what credit really entails and perceives credit as money that doesn't have to be paid.
There are those who find themselves in heavy debt, file bankruptcy only to start the cycle again once they are eligible to apply for new credit. Creditors know the profiles well and typically try and entice those who they think will be tempted to regain credit.
It is not uncommon for students to find themselves in high debt due to credit cards. This is often because credit cards target students knowing full well they usually have high financial needs, but are strapped for cash. Unfortunately this is a common occurrence and students quickly find themselves in debt.
There are obviously many ethical considerations of this kind of behavior from both the creditor and the cardholder, but nonetheless is a serious problem.
Irresponsibility can include people of any age and is not confined to any one group.
*Careless Spending
Careless use of a credit card can also lead to wading in dangerous waters. When using credit cards it is a good idea to keep track of all expenses and keep an eye on your bank account so you know how much you can afford.
Sometimes people spend constantly throughout the month using their credit card and are surprised when they get their bill at the end of the month. For those who can afford it, this isn't usually a problem, but those who don't make the income to support their vast spending on credit usually run into big financial problems.
*Not Financially Stable
Credit cards can be a lifesaver when a job is lost or another income dip takes place because it can be used as a short term temporary crutch until financial health improves (think get groceries when there is no cash). However, if the financial stability problem is long term, other avenues of support should be pursued and not reliance on credit cards because this can lead to long term credit problems and very heavy debt.
Credit cards are so easy to use, and if there is not financial stability to support the expenditures and pay off the debt, cards should only be used sparingly and only for necessities until finances are in better circumstances. Often people are lulled into a false sense of security where credit is concerned and this often spirals into serious financial troubles down the road.