Cash vs Credit: Why Ditching Credit Cards Is Better For You
With a lot of deals and steals everywhere nowadays, it is also getting harder to deal with debt, especially for credit card holders. However, you do not have to be a slave to a piece of plastic that you can actually live without. Here are some reasons why you should get rid of your credit card.
It Can Cut Off Poor Spending Habits
It is not very rare for new credit card holders to get trigger happy and keep swiping whenever they want to buy something. You might think that you will have enough by the time the debt falls due, but this is not always the case. A lot of credit card holders are slave to their cards without realizing it and this is why it takes a certain level of financial maturity before you should get one.
If you feel bonded to your credit card, you should ditch it as soon as possible. You can go to your old ways where you count your money manually and make do with whatever you have with your bank account. This is how your spending habits should be built. You should spend what you have and not what you do not have yet.
These Are The Worst Investments You Can Make
[su_quote cite=”Benjamin Franklin” class=”cust-pagination”]”Remember that credit is money.” [/su_quote]
When billionaire entrepreneur Mark Cuban was asked to share his best money advice, the owner of the Dallas Mavericks and star of ABC’s “Shark Tank” said that his dad had told him not to ever use credit cards. He even says that the one thing he wished he had known about money when he was in his 20s was that these are the worst investment that you can make. The money that you save on interest by not having debt would be better than any return you could possibly get by investing the same amount in the stock market.
Credit cards do have exorbitant interest rates as the typical one can charge up to 16.4 percent. When you do not pay off your balance in fill in each month, which is most likely to be the case, you can be set back by a fortune in the long run.
You Do Not Need A Credit Card to Get the Best Prices
Some people who have completely ditched their credit cards realized that they actually get better deals with just cash. Some realize that they get cheaper bills on car repairs and even on general maintenance work on their houses. Some merchants do prefer cash in hand. This is why you could end up scoring better deals without using a credit card. Cash can give your better bargaining power in a lot of situations, but this is also a skill that you would have to learn later on.
It Teaches You Money Management
After freeing you from the debt prison that your credit card had put you through, it is time for you to make do with whatever cash you have. This is when your money instincts start to kick in. You can only spend what you have now and while this is not the most convenient situation, this is what will serve you the best in the long run.
You might realize that while doing the groceries, you are more cautious in looking at the prices of individual items. You no longer load up the trolley with things you would not eat or use anyway. Later on, you will realize that you will be living on less money, which means that you will be saving much more than if you had a credit card.
You Rid Yourself of Fees
Even some of the richest people are not fans of credit cards. If you can go through what you need without a credit card, this also means that you rid yourself of all fees and charges that you would get if you had a credit card. When you do not have one, this also means that you rid yourself of annual fees, late-payment fees, over-limit fees, monthly interest and a lot of other fees and charges that might not even be in your vocabulary.
You are buying convenience when you have a credit card. While this might serve you better if you are financially mature, it is not really the best setup for everyone. What did you realize from this list? Share with us your thoughts in the comments below.
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