Disadvantages of using a credit card
All that is said in advantages of credit cards sounds very pleasant and enjoyable.
The biggest disadvantage is the tendency to over spend. Once you are used to un-monitored spending, the accumulated bills will send you into a debt trap. This is a situation where one has spent far too over ones earnings, and now is caught in a situation where the person is borrowing from other sources trying to pay the Credit Card Bills, but unwittingly creating much bigger burden as a defaulting borrower. It is for common knowledge that for unpaid bills accumulated over a few months itself, attracts variety of penalities, like Compounding Interest (Typically 2.95% Per Month), Delayed Payment Charges, Interest on unpaid Interest, Penalty etc.
You can never go for shopping just with your credit card in the wallet, thinking that why to carry cash, when I have the “All Powerful” Credit Card. After you have made purchases, the cashier may refuse to accept your Credit Card which is possible due to various reasons. Primary being, the Merchant has not enrolled himself with any Credit Card Issuing Agencies. On the other end of the spectrum, your card could be refused, since you do not have adequate Credit Limit available to complete the purchase.
Since you do not pay with Hard-Hand-Counted-Cash – which is the traditional way we are all used to, before the arrival of this Card – you may not realize how much of Your Own Money you have spent off via the Card, and it carries the real danger of making a person spend-thrift. Very unpleasant consequences follow. Life becomes miserable. One never bargained for this when he / she obtained the Credit Card.
Credit Card can be compared to Petrol, in that sense. One can use the Petrol’s power by fuelling an engine and use it for any productive purpose OR one can use the petrol in the most reckless manner, like using it to light up a stove. Sheer Idiocity. Isnt it? Hence one needs to fully understand the responsibilities that comes along with a Credit card.