10 Reasons New Parents Should Avoid Credit Cards
If you have recently had a baby then you probably already know that you’re spending more than you thought you would. You can take solace in the fact that you’re not alone; most new parents find themselves stretching their budget further than they ever had before. No matter how much misery loves company, however, nobody likes to watch their credit card balances steadily increase over time.
If at all possible, new parents should try to avoid using credit cards. Why? Here are ten reasons:
1. You spend more with credit cards. Most people find that when they shop with credit cards they’re more likely to spend more money than if they use cash, checks, or a debit card.
2. You buy things you don’t need. It’s so much easier to make impulse purchases when you have a credit card in your hand. Every new parent knows how easy it is to buy every cute baby item you come across.
3. You obligate future income. When you use your credit card you’re basically saying, “I know I can pay this in the future,” but nobody really knows that for sure. Take care when obligating yourself to pay something down the road.
4. You pay interest. Unless you pay your credit card balance each and every month you’ll wind up paying interest charges. Even if you have a relatively low interest rate you may still wind up paying close to $100 a month in interest if you have a high balance.
5. You might pay fees. Send a payment in late or exceed your spending limit and you’ll wind up paying costly fees. You have better things to spend your money on, like diapers or teething rings.
6. You start to rely on credit cards. If the costs associated with a new baby have you using your credit cards more than usual, beware. It is all too easy to fall into the pattern of using credit cards for every day expenses, and this is a dangerous situation.
7. You don’t budget. Turning to credit cards to make purchases means that you don’t have the cash to buy the things you need, and that means you probably aren’t budgeting. If you don’t have a budget in place then now is the time to write one.
8. High balances can hurt your credit score. If you are piling up your debt then your credit score may suffer, even if you make payments diligently every month. You’ll want a great credit score for when you finally give in and finance that minivan.
9. Spending habits as a new parent endure. The way you spend money right now will have a lasting effect on your future spending habits as a parent. Set the precedent now to only use credit cards when you really need to.
10. Before you know it, your baby will start to pay attention. Do you really want your child to grow up thinking that every time you want to buy something that you can’t afford you simply reach into your wallet and pull out a credit card?
Credit cards can be useful if they are used responsibly, but when a new baby comes along you may find yourself much more tempted to spend with reckless abandon. Use your credit cards as sparingly as possible and you have a much better chance of keeping tabs on your finances.
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