Is it Safe to Have a Credit Card?

Whether we have a credit card or not we may sometimes wonder whether it is safe to have a credit card or not. It is actually well worth thinking about this as we might find that if it is not safe for us to have one then it might be a good idea for us to stop having one. It is good to understand the answers for and against having a credit card.

Problems with credit card safety

There are a few potential problems that we might have with regards to whether it is safe to use a credit card. The first is that we might end up using it to spend more money than we can afford to repay and we might find that we miss repayments.

Having a credit card means that we have the opportunity to spend the amount of money that we have as our credit limit. This could be hundreds or even thousands of pounds. It is nice to spend money, treat ourselves to things or experiences and have fun with it and there are some people, that when they first get a credit card, they will spend lots of money using it as if the money is a gift for them to spend. This is the first area where things might get out of hand. Spending on all sorts of things, which we might otherwise not really need or perhaps even want will mean that you will have all the money that you need to repay. It might be that you will not be able to afford to pay for them all when you get your credit card bill. This means that you will just have to repay a smaller amount and pay interest on the remaining balance which means that you will start to accumulate charges. It can be easy to forget about these charges and not calculate how much they add up and therefore how much they will cost you. As you are charged monthly and you repay that charge, you will not see it adding up and how much the loan is costing you.

It is also possible that you might miss repayments. If you miss the minimum repayment, which is usually quite small, then you will have additional charges to pay. This can make the credit card even more expensive. 

Solving these problems

You need to make sure that you do not see the credit card as a savings account where you can just spend your money, but similar to a short term loan. Remember that you are spending money that does not belong to you. Some people use the cards and pay the full balance off each month. You can set up a direct debit to do this and it will mean that you will not pay anything for the card. You will need to keep track of what you are spending though and make sure that you will only spend a low enough amount of money that you will be able to repay it. It can be wise to even set yourself a budget or spending limit so that you are sure that you will be able to manage the repayment.

Missing repayments can be avoided if you set up a direct debit to pay them off automatically. It can be a good idea to try to set up the direct debit so that it goes out of your account just after you are paid. Hopefully this will mean that there will be plenty of money available in the account to be able to cover it as you should still have some salary in there.