by Colene Pefley

Created on: May 22, 2010

Credit cards can be very dangerous if used improperly. Credit cards should only be used by people who are self-disciplined enough not to abuse them. Credit cards have become more of a necessity than a luxury and that attitude needs to change.

Each time a person swipes his or her credit card, that money is being borrowed, at sometimes ridiculous rates, and there are many things that should be considered before making another mindless credit card transaction. 

Credit cards have very few practical purposes. Some of them are: breaking up a larger purchase (such as an appliance or a piece of furniture), an emergency source of funds, and as collateral on purchases such as hotel rooms and car rentals.

Everyday purchases should not be purchased with a credit card, because if a person is using a credit card for things such as coffee, groceries, and gas, then there is a financial problem.

Money should not be borrowed for these purchases and cash (whether in hand or on a debit card) should be allotted for these purchases. It is very difficult to rationalize paying off a credit card for food and gasoline that one has already consumed. 

Another mistake is having too many credit cards. Store cards can be traps and this includes gasoline cards. They often come with an enticing introductory offer or rate, but after this period is over, the rates can be outrageous.

It is best to destroy these cards and cancel them once the introductory period is over because store cards really do not serve a practical purpose.

If you do not have enough money to purchase something, it probably is not worth the excessive fees attached to it. You will end up paying far more for your purchases in the long run. 

Paying only the minimum amount on your credit cards is also a costly mistake. Even if it only a small amount, try to pay more than your minimum amount each month.

If you are making the absolute minimum payment on your balances, you are paying a ridiculous rate of interest on your purchases. The fees on your purchases will increase, so the quicker that you pay off your balance, the more money you will save.

Credit is a tricky thing to understand. When you purchase things such as groceries, gasoline, or a cup of coffee at a local coffee shop on a credit card, you are taking out a loan on those purchases and that is by definition a problem. You should not need to borrow money to purchases necessities or frivolous luxuries such as these. If you find yourself swiping your card for these types of purchases consider trimming your budget a little and realizing your means.

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