Why Should We Limit Our Credit Card Usage?
Credit cards, if used improperly, are a source of trouble, you can lose control of your expenses, acquire bad habits and can get into debt very easily. Using credit card is not always free, and if you don’t pay in time you have to pay interest as well, so it can complicate your life.
The electronic money, entries, transfers and online banking are the results of the extraordinary technological advances of our era that has many advantages: speed, ease, comfort, and security. The downside is that it’s easy to lose perspective. It is difficult to always be aware of the costs we are doing, I’ll explain some reasons.
In economics there is a generally accepted principle that we have a predisposition to value more or less money, depending on the moment in time that we can have the same, prefer the present to the future time, that is to say $1000 today is preferable to $1000 in a year, so if you leave the money to the bank for a year they give the interest to compensate for not being able to enjoy your money today.
Paying by a credit card makes us postpone the payment date for a while and the amount we should pay today. we pay that amount next month or we can finance in easy installments. The idea is that the payment will be made later. So, it doesn’t trouble our financial position immediately as the logic is that we prefer to pay later.
Using the credit card is easy, and when you have it you don’t want to trouble you or your partner and children. Did you ever feel after a month that why you bought this when it was necessary and now you have some financial difficulty and can’t pay the bill? It happens with many people as they buy things even those are not necessary. For Example, you have a 21″ flat TV and you enjoyed it, you don’t have much earning but your partner asked to buy a 42″ TV. You used your credit card and bought the same. What are you doing wrong here? It is said Rick people have good albums and collections, but the poor people have big TV.” Rich and poor is not mean by money here. It’s all about your common sense.
When you pay with a card we are not shedding anything, only go through a little machine, signed or put the number “Pin” and go. The transaction is electronic, virtual, we do not see or touch. So easy, it is clearly more difficult to actually see what we are doing. Many people have real problems with the use of these “plastic guns”, ignoring the above principles.
I understand it’s not useful to think about how the credit card works, but you can not apply the same thought everywhere. Always use your mind and think about the consequence. Don’t spend unnecessarily. If you partner insists for something, and that is the necessity, you can’t say “No” but when it’s really not required make her/him understand. It’s kind of rude line that “Money doesn’t grow on tree” but we should accept it, especially when you don’t have enough financial backup.