When Not To Use a Credit Card

Credit cards are undoubtedly a marvelous invention and a godsend to the many millions of people that use them across the world every day. However, the frequency and accessibility of credit cards can hide the true nature of the beast, which left unchecked, can easily spiral out of control.

The Problem With Credit Cards

Interest rates on credit cards can make up a large chunk of the monthly repayments, leaving far less money for other purposes, such as saving for the future. With the number of people surviving longer, due to more awareness over health issues as well as better treatments, the population is aging and in the future, there will be far fewer resources to cover more people. There are currently talks by the federal government to cut Social Security payments right now.

Despite this, an increasing number of people are failing to adequately plan for their twilight years, spending more of their working years paying off debts rather than investing in either a retirement plan or other appropriate savings vehicle. Part of the reason for the higher levels of debt is undoubtedly the difficult economic climate, which is making everything much tougher to afford and leaving no option for many than to purchase much-needed items through credit.


Avoiding Overspending With Credit Cards

However, it is easy to overspend on credit cards without meaning to, with the sole intention of paying the balance off but never quite getting round to it. In the same way, most individuals without pension arrangements promise themselves that they will start saving for their retirement, but again, manage to find reasons to put it off each month.

The increase in online purchases is one reason why credit card bills are rising: paying with cash is a great motivator to keep expenditures to a minimum and seeing a dwindling bank account makes everything seem a bit more real. A good rule of thumb for paying by credit card is do not purchase anything which you don’t have at least half the cash for. This prevents big purchases that are way out of budget being put on plastic.

How To Use A Credit Card The Right Way

It is also essential to have a plan for any large purchases made by credit card. Vaguely hoping that you will be able to afford the repayments rather than budgeting carefully is a short cut to trouble. If you aren’t sure whether you have enough room in your monthly pay check, walk away and consider whether you really have enough money.

Juggling credit cards by using one to pay for another is also a bad idea, as it is a sign that debts have become too large to manage. Another indicator is having to use plastic to pay for purchases that used to be covered by cash, such as grocery shopping or evenings out.

In these cases, either debt consolidation or transferring all outstanding balances to one low rate card and cutting up all the others can help. To find the best deals on the market, comparison websites such as moneysupermarket.com  can be invaluable.

However, it is very easy to keep all attention focused on the credit card bills and forget about the future. That is why it is so important that you start investing as soon as possible. Nobody wants to be forced into working at 70 because they don’t have enough money to live.

Setting money aside regularly is an important step to ensure there is a sufficient income to enjoy the retirement years and with good financial advice, it is possible to maximize whatever savings are available to make your dollar work harder for you when you need it the most.


  1. I agree with not using a credit card if you do not know how you are going to pay it off but I disagree with saying just transfer it to one low rate card. To pay off my DH’s debt we moved it to 4 cards that were 0% because we could not get one card with a high enough limit. We were able to pay the cards off, however.

  2. I only have one credit card that offers rewards. I use it for my daily purchases, which for my frugal self aren’t very much. I pay it off every month and collect the rewards for gift cards.

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