7 Reasons You Hate Credit Cards

Credit cards have gotten a fair bit of flak in the wake of the economic crunch, but some people don’t need a recession to feel that their plastic is weighing them down. More and more, Australians are realizing the risk tied to credit card ownership, and switching over to cash and debit. The thrill of holding a new card and a new credit limit soon passes when you get your bill or miss your first payment, and you fall off your cloud onto the reality of new found debt.

It’s one of many scenarios that can make such a small card so unwieldy. But credit cards are part of the 21st century, whether we like it or not—we just have to learn to use them right. Here are some other reasons you may be uncomfortable with a credit card in your pocket, and what you can do about it.

1) They’re expensive.

Credit card debt isn’t cheap. You pay up to three times as much interest as you would in a mortgage, the fees never stop, and the rules are so convoluted it takes hours to figure out where the mystery 50-cent charge came from. On the surface it gives you spending power, but in real life, if you’re not careful, it can become your bank’s handy little cash cow. Keep the costs down by paying your bills on time, and charging items only when you really need to.

2) You have too many.

The Reserve Bank of Australia counted close to 15 million credit cards in circulation in January 2011, according to the Daily Telegraph. Most Australians have more than one credit card on hand, and a combined credit limit that’s often more than they can handle. If your wallet is thick with credit cards, you may want to consider letting some of them go.

3) They’re not helping your credit history.

Many people apply for credit cards as a way into the borrowing market. It’s a chance to build up credit history and prepare for your eventual mortgage application. But after a year or so, your score doesn’t seem to reflect your religious swiping and charging. This is usually the result of factors like your other debts, your credit limit, and your income. Your credit card can help your credit score along, but it won’t do the job alone.

4) You can’t make your payments on time.

The due date on your statement all but leaps out at you, but coming up with the money on time is never easy. And as cardholders will know all too well, missed payments are costly, from the finance charges to the hit to your credit score. SuperSA, a government-run super provider in South Australia, helps you calculate the real price of letting the debt add up.

5) Rewards programs are too complicated.

Freebies make credit cards appeal to those who can afford to pay cash for everything. But if you find yourself counting rewards every time you buy, or limiting yourself to certain shops to “maximize your points,” ask yourself whether it’s really worth the trouble. For people who have multiple rewards programs, credit cards can quickly turn from a helping hand to a headache. Stay in control of your credit card, not the other way around.

6) There’s always a new one.

So you just paid off a pesky balance that’s been on your back for years, and you’ve got a clean financial slate. Give it a few weeks and you’ll probably be getting offers from old and new banks again, with a fun rate and guaranteed approval to boot. Before you know it, you’re once again treading the dark path of debt. Banks have a way of doing that—and they seem to target those who need it the least, according to Creditcards.com. Resisting the urge is hard, but the hefty fees you’re saving yourself should be motivation enough.

7) They make you reckless.

This isn’t surprising—credit cards are designed to make you spend where you normally wouldn’t. But unless you’re being dragged kicking and screaming to the checkout counter, reckless shopping remains more your fault than the bank’s. Before deciding to blame credit cards for your financial woes, go over last year’s spending and see where you might have done better.

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