Are Credit Cards Bad?

Ah The Credit Card.  I remember when i got my first one about 7 years ago. I was like cool these could come in handy. I was in college at the time and mines was used for different things.  Then after bills after bills piled up on the cards, I wanted out.  I couldn’t do anything because the payment minimum  was too high for my income and when i did pay it the fees brought balance back up!  I called about relief from the cards and they all was maxed out.  This time in my life was so stressful that I never ever want to go through that again. I even had to go through a debt management program to get out this mess. I told myself – credit cards are evil and I don’t need them.  I used to say “nope, cash only.”

I know for a fact I am not the only one out there that experienced this.  Credit cards are a lucrative business and if you do not know how to use them then they can ruin your finances.  However they are not bad and can be a useful tool if you know how to use them.

In what ways they are useful?

  • Emergencies – Cars break down, bills come up out of nowhere, and things just happen.  Long as you use it strictly for emergencies you should be good
  • Paying all your bills on time – You can use a card to pay all your bills on time and use your money to pay the cards off.  Simple as that
  • Get Cash Back – Cash back cards are amazing.  You can probably get back money on purchases you gotta make anyway, like gas, food, and bills.
  • Build Credit – So you can buy what you really want, like cars and houses.

What credit cards can do to hurt you:

  • Credit cards are not income replacements, you have to understand how money works in general in order to use them correctly.
  • They are not made to carry large balances for long.  You have to learn how interest works in order to avoid paying too much for cards
  • Having a bunch of credit cards and using all of them at once can ruin your finances.
  • Not paying your balances and use your money in the bank too.  You will never get ahead doing it that way.

So Looking at this, you can be like well they even so I’ll stay away from them.  The problem is that this world revolves around credit, and you cannot even get something like a light bill in your name without it.  Why put down payments down when you can have good credit that can do that for you.  So for most people, 1 to 2 credit cards is all you need. I prefer the cash back ones for everyday purchases and bills. I like the low interest rate cards for any large balances and emergencies.

There you have it.  I think they are mostly a good thing, but use them wisely.

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