What kind of Bad Uses of Credit you know?
Use credit to extend your income. Your credit cards should be used for their convenience, ease of use, and relative safety – not as a way to make ends meet. If you are using your credit card to make everyday purchases that you cannot afford to pay in cash, then you are on the verge (at least) of debt trouble.
Making small, spur-of-the-moment purchases. If you get into the habit of using a credit card to make tiny purchases (gum, pop, etc.) you will end up spending much more than you would if you paid with cash.
Gambling. That’s right folks, you now can gamble on credit in some places.
Start your own little collection of credit cards. Having too many accounts open and too much available credit is detrimental to your credit score, not too mention that unlimited access to credit cards can cause you to quickly charge up more than you can afford to pay.
Using a credit card for a major purchase. While you should not discount the tip above to turn a low-interest credit card into a loan, you should never put a major purchase – such as a house – on a traditional credit card.
Let others use your credit card. If someone wants to borrow your credit card because he or she has not been able to get one, there probably is a very good reason that credit has not been extended to them! Do not allow yourself to be that at-risk lender.
Go on vacation. You really should not be going on vacation unless you can pay for it out-of-pocket. If you charge the cost of your vacation, then you will be paying for it long after your purchase is useful. This is, in essence, the definition of a “bad debt”.
Use a credit card to pay tuition. Student loans exist for a reason. If you charge tuition payments on a credit card, then you will end up paying an enormous amount in the long run – that is if you ever can pay it off successfully.
Sign up for the first credit card offer that comes your way. Credit card offers are incredibly numerous and varied, so in most cases there is absolutely no reason to obtain a card that comes with an annual fee attached and with a traditional, high interest rate.
Ps: Did you ever use your credit card for this purpose? Think twice now..