Why you should only use your Credit Card for Emergencies

Since credit cards were first offered as a payment method, they have become one of the most convenient ways to purchase products and services, but one of the fastest ways to get into debt.  There are many credit card offerings out there, particularly in the United States, that have different monthly payment requirements, different annual percentage rates and fees, with a lot of small print to go with itthat leaves many people wondering how to use them without getting into or either avoiding getting into more debt from using them.  In order to succeed financially, consumers must use credit cards responsibly before their debts get out of hand.

Credit companies offer many perks for using their cardsfrequent flyer miles points and cash back on purchases programs, while giving you the convenience of paying a minimum amount on your bill every month until you pay the balance off.  However, the unexpected things of life can quickly put a crimp in your budget. Combine that with impulse buying and you can easily accumulate a high balance on your monthly bill to the point that you end up paying more on the credit card’s interest than you do on the actual balance.This is the reason credit cards should be used with a backup plan in place, and best used only for emergencies.  Credit card companies are out to make money.  So disciplining your spending habits allows you to have more control over your finances before they have a chance to!

A reasonable nest egg may need to be set aside to handle roadside services, an unexpected household repair, or an emergency trip out of town.  Therefore, store up savings for the things you normally expect to come up at certain times of the year and space your spending and saving accordingly.  Finally, avoid impulse buying.  Bargain hunters love the thrill of finding a good sale, but if it’s not something that’s on your necessity list, refrain from purchasing it.

Avoid the temptation of shopping outlets or online promotions. Keep a list of what you specifically need and stick to it.  If by some reason you don’t have enough cash available and something needs to be taken care of right away, then using a credit card not only can get you out of a bind, but it can also be used for your records in case you have a dispute over a product or service you received later down the road. When used responsibly, credit cards can be a valuable tool to help keep you financially on track.