Some people justify their use of credit cards for excuses like they are more convenient and secure to carry than cash. However, most of the time, the main reason for using a credit card is not confined to convenience alone, but because with a credit card, it is easy to buy things that we want, even if we cannot afford them. Although a credit card can actually be useful in circumstances wherein you need to make a big purchase and a card is more secured, or you need to do online transactions, there’s more to a credit card than meets the eye. Here are just some of the risks for using this piece of plastic card.

High Interest Rates

 In this world, there is no such thing as free lunch. Credit card companies do not actually let you purchase and pay in installments because they are compassionate. They earn interest whenever you borrow from your credit limit. This is the reason why they are in the business, and whenever you delay your payments to them, you make them even happier.

They do not offer “no- interest periods” in cash advances

 In some circumstances when you need to borrow cash, you can take cash advances from your credit card. The downside with this is that there are “no interest periods” offered, no matter how quick you can pay the money, even if you pay it on the next day. You may want to explore other loan options before tapping into the cash in your credit limit.

Can ruin your credit score

 One single late payment can leave a negative mark on your credit report. Even though you can work on these marks, it may stay there for a while, and your borrowing options may be limited.

It Affects your Future Earnings

 In using credit cards, you are actually compromising your future income, since your mentality would be to buy now and pay later. If you keep on buying things in advance, you won’t have any left for future expenses that you might incur, and the credit goes on and on.

Legal Consequences

 If you default in your payments, a CCJ may be filed against you and you need to face legal consequences. It would be detrimental to your credit rating and it could stay there for at least six years, making it even harder for you to recover from bad credit.

Emotional and Psychological Effects

 Being in debt not only brings financial distress, but can also affect the psyche and cause misery in life. When you’re in debt, you lose peace of mind. Your major decisions are affected negatively, and moreover, your future plans are delayed.

Just like other financial tools, a credit card can be beneficial to one’s financial moves. But just like a double- edged knife, it can aid you or hurt you. Before getting one of those plastic cards, make sure you are aware of all the pitfalls so you won’t have to join the majority of the population who are buried in credit card debt.