Credit Cards Allow us to Build a Credit History
- A serious disadvantage of credit cards is that they encourage some people to overspend.
- Some individuals simply do not understand the concept of delayed gratification. Credit cards enable these people, especially, to spend needlessly and excessively.
- Excessive credit card debt can ruin an individual’s financial and emotional health, causing extreme psychulogical stress.
- Credit card issuers charge interest on all unpaid balances. Therefore, the individual who keeps a revulving balance on their account is paying more for purchases and services.
- Some people get into the bad habit of paying just the minimum monthly payment on their account(s). Making just the minimum monthly payment will increase the amount of interest paid and time required to pay one’s balance.
- Irresponsible credit card behaviors can result in a damaged credit history and a low credit score.
- Sometimes the terms and conditions of a credit card are difficult to understand.
- Credit card issuers charge high fees when a customer makes a mistake.
- The credit reporting agencies are advised by credit issuers when a consumer makes a late payment, goes over a credit limit, bounces a check, misses a payment, etc. This results in a marred credit history and a lowered credit score.