This is a question that many people ask themselves. Many give a resounding yes and others give a resounding no. Many say that borrowing is normal (justifying themselves) and others that credit cards are instruments of 'evil'. And the truth is that these are neither good nor bad, it all depends on how much the person knows about money.
Let's first take a look at how banks work. Banks make money on the interest they pay and lose on the interest they have to pay you. It is obvious that this is why they pay very little when you deposit and you have to pay a lot when you borrow. From a business standpoint, it is in the bank's interest for people to get into debt and pay them interest. That is why practically anyone today is given a credit card, especially in countries like the Dominican Republic where the interests are very high (up to about 9%) and are compounded monthly (it is as if it were on purpose)
Now, the one who understands that seemingly so simple, is a step above that of the vast majority of people. Now, when using a credit card, there are some important things you should know.
1. Credit cards are to spend the money that you know you are going to collect, they are NOT to spend and then pray that God sends you the money. That is why there are people who say that the cards are instruments of 'evil'.
2. Cards are to pay for necessities, NOT luxuries. If you have to pay for electricity and water, and you know that money is coming but you don't have it at the moment, then use your card. If you are going to pay a luxury, prefer cash.
3. Check the cut-off date: If you know what date the card cuts off, don't use it close to that date unless you have the money to pay it off fast.
4. DO NOT be late on payment dates. Most people do not know the power of compound interest. It is not multiplying for example 7% interest by 12 months to know what is paid at the end of the year, it is much more from there due to the power of compound interest.
There are of course many more measures, but we must mention the great problem of the poverty mentality when using a credit card and it is that: “ The vast majority of people use credit cards to solve their money problems, and that it is the same reason they go into debt. The same income that made a person get into debt is not the same that will get him out of debt "
I'm going to be a little harsh here. Do not tell me that what happens is that the money is not enough, that your boss does not pay you well, that there is a crisis, that prices have risen, blah blah blah. Remember that while you are in 'crisis' others are in the prime of their life. Instead of complaining about the scarcity, let's investigate what those in abundance do and think.
In conclusion, should I or should I not use credit cards? If you think rich, YES, but if you think poor, NO. If you think like rich you can leverage a card to earn money, but if you think like poor you will only use it to get into debt. I hope this information helps you to reflect and come up with new ideas to generate income.
