Money is essential as we pay for several expenses daily. Fortunately, most of our childhood is used to prepare us for how to make money, while our parents or guardian bear our financial burden during those times. However, it is expected that at some point in time, we have to become independent and be able to make our own money and start catering for our expenses. When this time comes, there will be many ways for us to use the money that we have made. Some of the major ways include cash, cards, and online transfers among others.
When it comes to cards, there are 2 major types of cards – there is the debit card and the credit card. With the debit card, you can only spend what you have on the card. Since both cards are mostly linked to a bank account, it means that you can only spend what you have in the account on the card. The credit card, on the other hand, has a sort of automatic loan on it.
Hence, apart from the amount you have in your account, you also have a credit limit of a particular amount. This implies that after you finish spending the amount you have in your account, you can continue spending money till you get to that particular amount that serves as your credit limit. An alternative to using the credit on your credit card or if you don’t have a credit card is opting for short-term loans options. You can easily read about the right credit card financial institution or loan company to patronize on Luminablog.com.
You might be wondering if it is advisable to use the credit feature in a credit card without necessity. The straight answer to this question is that it is NOT advisable to use the credit feature in a credit card without necessity. The major reasons why you should not use the credit feature in your credit card without necessity are discussed subsequently.
You will have to pay interest
Using the credit feature in a credit card does not come for free. This implies that whenever you sue some amount from the credit feature in your credit card, you are made to pay interest on the amount you spent. Hence, when you use the credit feature in a credit card without necessity, you will be paying interest on the amount for no just cause. This is not the best way to manage your finances. It is a different ball game if there was an emergency or if what you spent the credit feature on was worth the amount you spent plus the interest you will be paying on it. When this is not the case, then you would be doing yourself a great disservice.
Inability to use the credit facility when needed
Imagine a situation where you decided to use the credit feature on your credit card to gamble and lose or to buy drinks for yourself and your friends. A few days later, before you were able to pay back, you have an emergency but you no longer have any money in your account and credit feature. You would become stranded and probably opt for small loan companies. You will now be indebted on 2 fronts, with interests accruing on the 2 fronts. This could leave you destabilized for a long time.
You could become indebted
A major problem with taking the first loan is that you might have to continue to take regular loans to catch up. The same applies to using the credit feature on your credit card. After using it for the first time, you might find yourself using it every other month and having to pay interest in those other months as well.