Foolish ways of Using your Credit Card

Here at Budget Sense, we almost always recommend against credit card usage, unless in extreme and desperate situations.  But of course, credit cards can come in handy in certain situations. But they can also be abused by being used to buy things that just don’t justify the purchase.

What are some foolish ways of using your credit card? let us go through them and explain why they don’t make sense from a financial budgeting and debt point of view:

Using  a Credit Card to buy something expensive when unemployed
When you don’t have a job, the last thing you should think about is buying expensive stuff, let alone using your credit card to make the purchase.  Sure, you may not have the money and is easier to put it all on your credit card. But during a time of need and no steady income flow, the last thing you want to do is buying something you don’t need and probably only want. Put it off for now, and buy it when there is a steady flow of money coming from a stable job. Or, you can start saving for that big purchase, little by little.

Using one Credit Card to pay for another
This is a classic one, and most of us are probably guilty of doing it one time or another. This is like covering the a hole in the ground with mud from another hole you had to dig right next to it.  Some resort to this tactic when one credit card is completely maxed out and is due, while the other has a zero or little balance to speak of, so makes the transfer easier. But regardless, in the long term, this doesn’t help and will probably lead to both cards being maxed out and costing you a lot in interest payments.

Buying things when you can’t even pay your bills
So you can’t even pay off your bills on time, yet you are using your credit card to buy a new pair of shoes, a new gaming console etc? Your priority at this time is to save and come up with some money to pay your due bills and not use a credit card to buy things that are not necessary.

Using your credit card like an ATM machine
This is generally referred to as  “Cash Advance.”  This is another classic example and one of the worst.  That is to simply withdraw cash from your credit card, where the interest rate can be ridiculously high. Again, unless you are in extreme need, it is best to avoid this at all costs.

Using your credit card until you maximize your balance
Some people will keep using their credit card until they have maxed it out. It is like they can’t stop until they have exhausted their balance and there is no room left.  The idea is not to maximize your balance, but rather to keep it to a minimum or even zero.


There are many more examples of foolish ways to utilize your credit card, but this list simply demonstrates some of the most common ones.  A credit card is a way for you to buy something and pay for it later, ideal for situations when you don’t want to pay right away. But to use it to pay for something that you know you won’t be able to pay it back later, doesn’t make financial sense.  Credit card companies have done a great job in conditioning us to use these plastic cards like some sort of bank where you can purchase and spend with no second thought about future implications. It is time to rethink that and treat your credit card as you would your most sacred and dearest things to heart. If you don’t respect a credit card, you will end up paying dearly and probably for a long time to come.