My Blog, Your Money

Last week, I wrote about the benefits of credit cards.  This week, I’d like to take a look at the flip side by listing (in no particular order):

My Top 5 Reasons to Not Use Credit Cards:

1. Increased spending- Credit cards make spending so easy that you’re more likely to spend more money.  When you use cash, it’s easy to see how the money flowing out of your pockets.  You don’t get that feeling with credit cards.

2. Remembering to make payments- Maintaining good credit requires discipline and responsible behavior.  If you’re not particularly good at making regular payments on time, credit cards are definitely not for you.

3. Fees and charges- Many expenses are tied to credit cards including fees for late payments, charging over the credit limit, and annual fees.  Also, if you carry over balances, you will be hit with financing charges usually at high rates.

4. Identity Theft- Identity theft is becoming more and more of an issue these days and can be a major hassle to deal with should thieves get a hold of your information.  Be cautious with your personal information to reduce your risk.

5. Mom and pop retailers- Credit card companies charge interchange fees to process each transaction.  For small businesses such as mom and pop retailers, these fees can really add up and make it harder for them to compete against their larger competition.  If you want to support small businesses, paying with cash would really help them out.