For many people, credit cards can be useful, providing they are used wisely. Very often, they help us to stay financially afloat. And they are growing in popularity.
Analysts predicts that by 2026, 60 million of us will be using cards daily. Many of these payments will likely be made on credit.
It can be easy to misuse a card, but luckily, with guidance this can be avoided. Here, we explore what you shouldn’t buy with borrowed money.
Personal Rewards
A fancy coffee. A take-away. A trip to the cinema. A personal treat can really boost a person’s mood, but pay for it with your credit card, and you may regret it later.
Why? Because a credit card is designed to cover the essentials. Ideally, it shouldn’t be used for impulsive buying. But don’t worry. With a self-made fund, you could pay for non-essential items with your own money.
In turn, you can make sure that spontaneous purchases don’t interfere with your planned credit payments.
Risky Investments
Risks can be fun to take —– but they don’t always pay off. For financial ventures, it may be better to use your own assets, instead of borrowed money.
Likewise, if you’re a prospective or current student, we recommend that you don’t use credit cards to cover tuition fees and accommodation.
That’s because student loan interest is classed as ‘good debt’ and doesn’t follow a strict monthly repayment schedule. So if you are out of work, or do not earn the required threshold, you are not required to make monthly repayments.
Cars
Cars can be a good investment. But the costs don’t end once you’ve bought one. Repairs, maintenance and insurance all add to its ongoing expenses.
Use credit cards to buy a motor, and you’ll have repayments to pay on top of these charges. Do you really want that? If you pay for a vehicle with your personal funds, you can save borrowed money for vital emergency purchases.
Credit cards are useful devices for people that need money. Therefore, it’s important to ensure that you use them for the right reasons. With these tips, you could improve how you spend borrowed money.
If you want to make the most of your own assets, you can also consider other methods of financial management including careful budgeting and taking on extra work. How will you decide to save money?
