Credit card debt always receives a bad reputation, especially as far as personal finances are concerned. However, credit cards are still a great financial tool for many people. Like everything else, credit cards have both advantages and disadvantages to using them.
There are many reasons why credit cards are important; for instance, they can be used to boost your credit history and score, giving you a better chance to access a loan when you need it. You will also be able to make purchases online, something that is virtually impossible to do with cash. There are great rewards too, especially if you are using a credit card that offers you reward points whenever you use it. The problem is, a lot of people these days are using the wrong credit card.
However, it is also important to note that once you have a credit card; it can be very difficult to change to another credit provider. Many people know they have signed on to the wrong credit card provider, but they have no choice but to stick with them because they believe the hassle of moving is just too stressful.
The card you choose will depend a lot on your thought process and the kinds of decisions you make every day. If you have a flawed thought process or if you have a history of making the wrong decisions, then you could choose the wrong credit provider which could lead you to incur high penalty costs. When it comes to use of credit cards, properly thought out decisions should be made. Failure to do so may lead you to bad credit card practices and a bad credit history as a consequence.
Choose a Credit Card Based on the Information You Have at Hand
A lot of people are stuck with the wrong credit card because they do not want their investment to go to waste; therefore, they continue putting more resources into it. Their time, money, and energy end up wasted just because they do not want to let it go. If the rewards are not beneficial to you, then you may need to reconsider the usefulness of the card.
Before getting into that sort of investment, consider the information you have and make an informed decision based on the costs and rewards of the card. However, if you are already using the wrong credit card, then the best thing you can do is get rid of it quickly. Find a credit card that has better terms for you and not just the credit card company.
Make a Change
For many people, it is easy to stay in a bad credit relationship because making a change is just too stressful. This is especially true for people who know they are with the wrong credit provider. Many people think that making a change will be too hard for them and provide them with little or no benefit. If you are in a situation with a high interest rate, then making a change is the best way out of credit card debt.
Think about the advantages and disadvantages of making a change and weigh them against those of staying with your current provider. If you are facing high-interest debt for instance, then you will probably benefit more from a change than staying in the same situation. Luckily, it’s easy to make a change these days.
For instance, you can start using cash, or switch to a balance transfer credit card, instead of accumulating more debt on the expensive card. Make it a priority to clear the debts on the high-interest card. When you have cleared out that debt, then you can move forward with a new credit card.
Do Not Be Afraid to Switch
Many people are stuck with the wrong credit cards for fear of making a decision they may regret in the future. Do not just think of what could go wrong, but rather, think of how much you can lose if you do not act. This should give you the strength to take action. It is true that applying for a new credit card will affect your credit score, but that is temporary, and it should not stop you from making a necessary change.
Another worry many people have is that they may apply for the wrong credit card again. To avoid this from happening, equip yourself with information, and weigh the benefits versus the costs to ensure that you will not end up with the wrong card again. You are smarter now; therefore, it will be easy for you to consider every possible drawback before making the final decision.
Credit cards are very helpful but only for users who are disciplined. They come with many advantages, but if you are stuck with the wrong credit card, you will not benefit in any way.
Author: Jeff Gitlen
Join the LendEDU Newsletter
News, insights, & tips once a weekThanks for submittingPlease Enter a valid email
Best Credit Cards by Type
Credit Cards by Brand