The 5 Dangers Around Credit Card Overuse

In this day and age, credit cards are somewhat of a necessity. There are times when a person or family may need to pull out a credit card to secure a hotel, vacation, or car rental; place a deposit on a major purchase; and these little plastic placeholders in our wallet can come in quite handy during an emergency situation.

Having said that, they are also quite dangerous to have, especially for those who love to shop, or have reward cards that encourage usage.

Below are five traps many people fall into when owning credit cards.


Past research indicates that people will spend more when they are using credit cards versus cash. In fact, participants in one study were willing to spend almost twice as much when using those plastic cards, compared to what they were willing to spend when using cash. Since you get your credit card bill monthly, it’s easy to go a little crazy with credit cards on a shopping trip, as you don’t really feel the impact right away. This also explains why it is so easy for some to rack up that credit card debt easily and quickly.

The Interest 

Which brings us to yet another danger of credit cards overuse. Once you start racking up those credit cards, it may be hard to pay them off. If you are one of those people who pay off their credit card balances in full each and every month, there’s no need for major concern; however, if you don’t, then a portion of what you pay each month goes to interest, which makes it that much harder to pay off those credit card bills in the long run.

Spending Is Difficult To Track With Multiple Cards

One trap that many families (and singletons) can easily fall into is owning multiple credit cards. One person within the family unit may prefer using a rewards-based credit card, while another person may be racking up a credit card with a lower interest rate. Regardless, the use of multiple cards across the board can create a ton of financial chaos when it comes to tracking spending, and repayments.

Racking Up Debt

… and if you are spending more than what you are paying off, you may find yourself slowly, but surely, seeping yourself into a debt that you can’t get out of. Increased debt can affect your savings, retirement funds, and education savings you set up for your kids. It can also create an extreme amount of financial stress for some people in the long run, creating anxiety and depression for individuals.

Credit Card Fraud

Overuse of credit cards may not only harm financial goals, but also places you at risk for credit card fraud. Whether your card gets stolen, or information around your credit card information is snatched, credit card fraud can become a very sticky situation for those who have to experience it. While most credit card companies do reimburse people who have experienced credit card fraud, it can be a huge hassle to deal with, and reporting this crime needs to be done rather quickly.