Even though a credit card can be a great asset, everyone needs to be aware that there are worse ways of using a credit card too. Therefore, when a person submits for their first application, they should know how to use this card without occurring a lot of unnecessary debt. So, for those people that want to know how to use these cards to their own advantage, and not to the best benefit of their credit card company, here’s 5 of the worst ways to use these cards.
#1 – Paying the Mortgage
It is not uncommon for people to get behind in their bills since they can add up so quickly. Especially when people are making one bad money management decision after another. When these situations begin to spiral out of control, the person may even have problems paying their mortgage. In some cases, people may look to their credit cards to make the payment. Unfortunately, this is one of the worst mistakes that a credit holder and homeowner can make. Reason is it compounds the problems by making them worst. In fact, high interest rates on the credit card on top of a late mortgage spells a disaster that’s very difficult to recover from quickly.
#2 – Paying Large Medical Expenses
Another recipe for disaster is paying for large medical expenses with plastic. Trying to pay this kind of debt is simply a revolving door that is difficult to come out of. Specifically, because the high interest rate is constantly being added to the large balance every month until the total amount is paid off.
#3 – Giving Uncle Sam His Money
Even though the IRS wants their money, paying this kind of debt off with extra interest is not the smartest move. Instead, people may want to talk with IRS reps first. Just to make affordable arrangements that can reduce the amount a little at a time.
#4 – Buying a Car
Even though it has been done by someone before, buying a car with a card is one of the most expensive ways to purchase a car. In fact, this is a bad idea for a number of different reasons. Including paying much higher interest rates and maxing out the credit line in one swipe of the card.
#5 – Funding Business Start-Up Cost
Starting a new business with this type of funding is also a very bad idea. Debt on top of debt will only make it difficult to get the business up and running efficiently. It may cause it to fail before getting it off the ground. In fact, this type of financial decision does not make good business sense. Specifically, when it relates to handle the business’ spending and funding efficiently and effectively.