Credit cards are great for those that don’t depend on them. There are some people that are financially secure and don’t depend on their available credit to purchase their necessities or pay bills. There are other families that are in stressful financial situations and depend on their credit cards and available credit to pay their bills and necessities. A dependency on credit cards can lead people to discover the ugly truth about their credit cards.
Attachments Lead to Less Money Spent
It’s easy for most people to use their credit card for various things. For many people, it’s easy because they aren’t attached to the money available to them through their credit card. Because there is no attachment, it’s easier to use.
When people have to use cash to pay for their bills and necessities, most don’t want to part with all of their money. The money they spend is often a symbol of their hard work during their pay cycle. Because it took effort and time to earn their money, most want to save and savor it. Most don’t realize why they are attached to their money until they realize it’s something they have earned and represents the time they were away from their loved ones.
When people choose to spend cash instead of using their credit cards, most people spend less money over time. One of the first reasons this happens is because there is no interest to pay with paying for items and bills with cash. When a credit card is used, the cardholder has to repay the amount of money they spend and the interest fee that accrues on their credit card. There are some families that have interest rates as high as 35%. That is a huge interest amount to add to the cost of breakfast each morning.
Who is Credit Important To?
Credit is something that should be important to everyone but it’s not. There are thousands of people that don’t know what credit is and how their financial decisions will shape their future. Because finances are very important to everyone’s future, credit is important.
Credit is important because it’s what is reviewed when applying for specific items. When a person wants to purchase their first car from a dealership or their first home, companies look at their credit history. Those that have a good credit history and a high credit score will be able to purchase the items they want with a lower interest rate. People that don’t have a good credit history or a low credit score may not be able to purchase the things they want until significant changes have been made.
Having a good credit history and high credit score is beneficial to everyone. When a person has a good credit history, it shows companies they are financially responsible and can be trusted to repay their debts in a timely fashion. This trust allows people financial security when an emergency happens and something has to be paid for. For those that have a bad credit history, financial certainty doesn’t come until their credit score and history improves significantly.
While getting and maintaining credit is hard for some, it’s not impossible. Those that have credit cards shouldn’t be dependent upon them. Credit cards are a luxury, not a necessity and those that want a secure financial future understands that.