It’s nearing the end of the month and your bank balance is looking bare. It’s so low that you can’t afford a drink and a packet of peanuts in your local establishment. Yes, you’re officially skint.
People say they are broke and have no money, but they don’t mean it. Their balance might be low, but they’re in no danger of missing the rent or mortgage payments. However, you’re struggling and want to turn to your credit card to help you through.
It’s a bad idea for several reasons. Continue reading to learn more about them.
There’s No Buffer
Paying with a piece of plastic can be a wise move as it gives you breathing space before the full amount is due. But, when you’re boracic, you don’t experience the full benefit of credit since your funds usually run out at the end of the month. And, that’s when your credit card statement is due, too. By switching from a debit account to a credit account, all you do is increase the chances of missing payments, which leads to high-interest rates and more debt, as well as a low credit score. To use credit wisely, you must plan to get the breathing space you need.
The Limit Is Dangerous
A credit card has a maximum limit. In the UK, the average is between £3,000 and £4,000, which is very high. Not only is it large, but it’s dangerous as you might be tempted into spending more than you can pay back. At least you have the option to top-up your finances with small amounts that are more straightforward to clear with payday loans. After all, £50 is a lot simpler to manage than £150 or £200. Therefore, it could be healthier to consider other credit options instead of continually leaning on your credit card.
Creditors Are Flexible
Creditors have bad reputations. Most people assume they want their money at all costs, but this isn’t the case. They do want you to pay back the amount you owe, which is why they often set up payment plans for customers who struggle. From their perspective, they’re more likely to get their money back if the repayments are lower. From yours, it’s much easier to meet deadlines when the figures aren’t as big. Plus, agreeing to a payment plan provides peace of mind and stops you from stressing.
It Becomes The Norm
Once you do it and it doesn’t end in tears, you’ll continue to do it month after month. It might never be a problem, yet the odds are higher that you’ll fall foul of credit card companies sooner rather than later. Using credit cards means you don’t have a budget and find it tough to practise self-control. By cutting them out of your routine, you’ll be less likely to receive penalty notices. Also, you won’t see it as normal and should be able to drop the habit.
There are many reasons to avoid credit cards when you’re skint, but the main one is that there are alternatives.