Why Credit Cards Are A Terrible Trap For Some People

I’m not saying credit cards are bad. I’m just saying that for some people, especially spenders like me, they can be a terrible trap. 

Believe me, I know. I got my first credit card in college (big mistake. But everyone was getting one, so I did too.). Ever since then, I have been trapped in a cycle of maxing out my credit cards out and then paying them down. It’s like a rollercoaster! Up, down, Up, down.

I should never have gotten involved but I didn’t know what they were. Now I do.

What is a credit card?

Here’s the quick rundown on credit cards. They are a loan. You will have to pay back whatever amount you charged with the card. 

The day you open the account will usually be the due date you will pay your monthly bill. Say you opened a charge account on June 15. Well, you’ll have to pay your next payment on July 15, then August 15, and so on. Some companies may let you choose your due date.

If you have a balance (the total amount charged) for any month, you will have a minimum amount to pay. This is a fraction of your total. For example, if you charge $100 worth of stuff, your minimum payment is like $15 or something like that. Now you have the option to pay the total if you want.

Now with that aside, there is something that happens that is a little tricky. Each day, the balance isn’t paid, a fee is calculated. It’s called interest (a percentage of the total amount you charged). I don’t understand the math behind how the interest is calculated. I just know that with each payment you make, you will pay the interest that has accumulated.

If you miss a payment, you will be charged a late fee for that missed payment. So, if you don’t pay the whole or minimum amount each month, that owed amount and interest will carry over to the next month. So each month, the amount grows. 

How to avoid the trap

That’s why I call credit cards a trap.  The only way to avoid this trap is to not get involved with credit cards.

Now that is easier said than done because they are used everywhere. Some places will only accept credit/debit cards. It’s becoming harder and harder to use cash. So how does a person survive without a credit card?

There is a way. Keep reading.

An alternative to credit cards

Dave Ramsey (no endorsement), a talk show host and author who has helped A LOT of people get out and stay out of debt, gave some excellent advice. He said a debit card could be used instead of a credit card. Since the debit card has the Visa or Mastercard logo, it can work as a credit card; if needed. 

I tried it. Back before debit cards were a big thing, there were a couple of times when I used my debit card as a credit card. No problem. Now debit cards are accepted everywhere. I have used it for all kinds of things, like purchasing things online and reserving rental cars.

Since a debit card is tied to your checking account, you can only spend the amount in your checking account. This helps not to overspend! Also, there is no interest because the money comes from your banking account, not a credit company.

If you want to get a debit card, check around. Most bank and credit union checking accounts have debit cards attached.

The takeaway

A credit card can be a good thing; for someone who will use it responsibly. On the other hand, it can be a terrible trap for someone who is a spender, such as myself.

Though credit cards are used a lot today, a debit card can be used as an alternative. Since it’s tied to a checking account, there is no interest being charged and only what you spend will be taken out. This is a good way to manage spending.

Think about both options, and then go with the one that’s best for you!

If you have a comment or a story you’d like to share, please leave it in the comment section below. I would love to hear from you!

Just saying.