Everything today revolves around credit. The credit card is the modern currency, plastic money as many call it. However, not everything is positive about credit. It can also give you a negative outcome as will be discussed later. The credit card was actually invented so that individuals will not have to bring cash with them. So why not go to top7binaryrobots.com and invest your credit there? Transactions were deemed cash because it had to be paid at month’s end. Banks extended its use by allowing cashless transactions and installment payment. By charging high interest, banks were able to spread the risk of delayed payment. To increase your personal finance, you need to use credit cards wisely.
It Goes against Savings
When you use your credit card, it basically means that you don’t have money at the moment. This goes against the principle of saving that states you need to save before making a purchase, since buying it at the moment basically means you cannot afford it. Credit allows you to buy even if you can’t afford it and allows you to buy even if you don’t need it at the time. If you are constantly buying on credit and at month’s end your total expenses is more than your income, it is a negative sign. It means you will be in financial difficulty for the rest of the year.
It Feeds on Compulsion
Consumerism feeds on buying compulsion. To push it all the more, stores give you discounts and present product as on sale or off the regular price. If you are not careful you will end up with lots of purchases of things that you bought for the reason that they were sold at a big discount. On a survey made on credit card buyers, many were found to buy items that they really did not need at the time of purchase. The convenience of buying is a big factor. This can be negative for your personal finance. You will end up in debt instead of ending up with an investment.
It Charges so Much
Buying on credit comes with a price. The price of convenience is charged too much. When you buy on credit, the bank assumes the responsibility of paying the store where you made the purchase. This is treated as a loan and as such an interest is paid. Depending on your country and location, banks charge at least 5 percent per month on purchases made on credit. This is equivalent to 60 percent per year. If you pay the entire amount at month end, no interest is charged. However, the reality is that only the minimum amount is paid and you pay high interest.
It is not Good for Personal Finance Goals
If your goal is to have a healthy personal finance, then depending on credit for your purchases is not advisable. You need to be prudent in order to save something that you can use for investment. Saving money in a bank account is a form of investment. If you are constantly paying your credit card bills, chances are you don’t have money for saving. This can be tragic for your personal finance goal. If you have excess cash you could always invest in binary options and use Binary Option Robot.