Demystifying the Negative Impact of Credit Cards on Your Finance


You are getting all your favorite things from the mall without even waiting to get the salary. Well, who doesn’t want this kind of financial leverage? For this, your earning should be of the 6 digits, but this is not possible for everyone to reach this stage stature. Now, people have other alternatives where they get to enjoy such all these things with the help of credit cards.

Just swipe the card and purchase the item for which you don’t have enough cash to buy. But, the so-called financial tool that is designed to help people make their spending easy can also be a great curse if misused.

Demystifying the Negative Impact of Credit Cards on Your Finance

Why using a credit card might not be actually of great help?

Well, the first thing that you need to understand that you don’t owe the money that you are going to spend by swiping the card. In the end, you will have to pay the money back along with the high interest which the credit card agencies are notoriously known for.

Here, in this blog, we have prepared a list of top reasons why you must avoid credit cards and how it can affect your finance negatively. So, let us get started.

Reason # 1:- They are risky

Credit cards might sound like the magical tool of trade in the starting; but the longer you will use it, the higher will be its damage. The credit card bills that you will be getting at the end of the month will be the debt that you must clear on time.

 Not making the repayment on time can affect your credit score and also you might face a hefty penalty. Thus, it is better that you avoid the usages of credit cards as much as possible and if you have a genuine need for it, then limit the usage of the card. Now, you must know that there are various financial occasions where the credit score is checked such as:

  • When applying for a loan
  • Getting an insurance
  • Finding a place to live on rent
  • Getting a job

Reason# 2:- They can make you financially vulnerable

Most people using credit intentionally or unintentionally build a mindset that they have a tool that can help them in purchasing whatever they need. Well, it can also crossfire at a certain time when the user started relying on cards very much.   

The habit of buying new things frequently will make it difficult to create a budget as you don’t have a fixed amount of expenses. The use of credit cards can result in overspending habits that will ultimately lead to severe financial trouble.

Reason #3:- Credit cards encourage making impulse purchases

Another major drawback of having a credit card is that it encourages people to make impulse purchases. Now, you will simply avoid buying anything expensive when you certainly don’t have enough cash in the pocket. But, with the credit card in your pocket, anything that you find tempting can be purchased easily as you probably have the leverage of paying the bills later.

However, this also encourages the user to purchase at any time of the month irrespective of the financial situation. This can affect you in various ways including:

  • A Huge bill to pay
  • Might buy things that you don’t precisely need
  • Affecting your budgeting skills
  • Snatching the self-control that the user has on his/her finance

Reason 4:-   missing out the fine print can be a grave mistake

Most of the credit companies have policies of charging fines to the defaulters. Now, this is mentioned in the contract given to the user during the sign-up. Unfortunately, the print of the penalty is so small that you might feel like to skip it and go through the central part.

You can call it a marketing tactic to lure the customer, but it’s for the consumer’s most significant benefit to go through all the documents provided by the credit agency. If you go through it clearly, then you will find it mentioned that the rate of interest would keep on fluctuating as per the user payment.

By far, this was the primary reason why you must avoid using credit cards. In any case of emergency or financial crisis, you can always approach a direct lender to 100% guaranteed approval loans. But, make sure that you are offered a reasonable interest rate.


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