Why it’s a bad idea to heavily rely on Credit Cards?
Have you ever used a credit card for any of your emergencies? Did you analyze the consequences of it later? Well, most of people say that the main purpose of their credit card is to assist them in times of emergency. But, is it really a good idea to rely solely on a credit card in emergency times? Well, several of the recently conducted surveys and studies have concluded that relying heavily on credit cards for emergencies is not really a wise thing to do. Several financial gurus also suggest that an emergency fund should be a top priority rather than a credit card.
Here are the dangers of relying on Credit Cards:
If you’re confused whether a credit card should be relied upon, the following factors will definitely clear up your mind about this aspect, so continue reading:
• Uncertainty: Well, credit is not really your money since you’re simply borrowing it. Would you rely on your friends or family members’ money for emergencies? Most probably not, right? Then why would you risk relying on a faceless organization’s money for your emergencies? Wouldn’t it be a much better thing to have an emergency fund?
• Paying Interests: For emergencies, you will probably spend money from your credit card without thinking through, as your main priority at that time will be to get out of that emergency situation. Later comes the part of paying an interest on your credit, which can skyrocket if not dealt with properly.
• Debt Risks: Using money from your credit for your emergency officially gets you a debt. If you spend too much money for your emergency, you could easily get buried in debt, which makes your future very troublesome.
• Unexpected Emergencies: What if two emergencies hit you back-to-back? You could easily max out your credit card. This is exactly why it’s a bad idea to completely rely on credit cards for emergencies.