Misuse of Credit, A Common Financial Mistake

Misuse of Credit


One of the biggest financial mistakes is living beyond our means. Unfortunately, for many of us we have an all too easy way to buy things we really can't afford : a credit card. Some of us have lots of credit cards. All of these credit cards usually carry a heavy interest rate and come with all sorts of fees and late fees.

We already can't afford the items we are purchasing with credit cards, now we are adding the extra burden of interest on top of the price of the items.

Sometimes we use credit cards for convenience. We make small purchases on credit cards, like food or gas or clothes. Each time we are adding quite a bit of interest on top of everything we purchase.

When to not use credit cards

Stop using your credit cards for miscellaneous purchases. Only use your credit cards for large purchases, when you could use that extra protection that some credit cards offer. Using credit cards for day to day purchases like gas and food will wind up costing you a lot more in the long run and it does add up!

Learn to budget your money. When you get paid, set aside some cash for the next week or month, for those day to day purchases. Fill up your gas tank, the day or the day after you get paid. Buy groceries the day after you get paid and think about bringing your lunch every day to work. Work on a budget or different habits that changes that "charge it on a credit card mentality". Also, working with cash or without your credit cards usually means you will be a little more thrifty and requires a little more forethought about where you money will be going.

Over time this will make a dramatic and positive impact on your finances. Remember, using a credit card for convenience isn't as convenient as you think it is, when the credit card bill comes due.

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