A credit card is a great credit facility to have, and it can be especially helpful during emergencies. But when using this facility goes unchecked, it can become dangerously addictive to the user. It is nice to have such a spending tool at your disposal, but most users are under the impression that the credit limit on the card is free cash; it is not. The credit limit provided by the bank is basically how much you are allowed to “borrow” on the card. Here are five signs to identify a credit card addiction.
Someone with a credit card addiction will consciously know that they are spending unwisely. Due to guilt, they will hide their bills from their family or partner. If they are hiding their monthly statements or not telling the truth about their purchases, there’s more to their behaviour than just being secretive. It’s too easy spending money that’s not yours because you don’t feel the pinch – yet. On the other hand, they also know that it is wrong and will jeopardize their finances in the long run – causing them more inconvenience in the future.
Another issue arises when some users ignore their credit card bills. In this case, ignorance is not bliss. You should start repairing the situation by being honest about possibly having an addiction. Have a look at your current bills and be honest about the matter with your partner or family. Seeking help from your loved ones might be the help you need to remedy the problem.
If you feel anxious when you are unable to use the credit card for spending, this is also another indicator. Anxiousness, when you are not able to spend with your credit card, shows an addiction to the act of using the card. You may also experience anxiety when you feel that having cash alone is not enough. You feel secure and safer when you have the credit card with you regardless of the amount of cash you have on hand.
On the flip side, you could be very short of cash as you are spending all the money repaying your cards causing you to run out of immediate cash. Eventually, it becomes a cycle when you use all your money to pay off credit card debts. And then you accumulate debts again by using your card because you run out of cash.
Another sign of credit card addiction without an emergency purchase is a maxed-out card. Or cards. It is understandable to have the card maxed out by spending on an emergency, but if the card is used up by non-essential spending, then you might have a problem. If your total credit card debt is more than what you earn, then you need to look into serious cutbacks and work out ways to curtail your spending to break the addiction. Making only the minimum payment on a maxed-out card will only make you poorer as the interest snowballs. The longer you drag out the repayment, the more debt you accumulate as time goes by.
Possessing multiple credit cards means you will be juggling many minimum payments so that you can keep all cards usable and not over-limit. You will be overstretched financially, and this can be very stressful to deal with. This situation might also exacerbate more non-essential spending so you can cope with the situation.
If you are managing more than one card and can’t manage to keep any of them under the credit limit, then first, you need to stop using the cards. Start repayments slowly and refrain from any further usage. Or better yet, cancel them because that would take the temptation away. Living on credit is not a healthy way to survive, and the cycle of debt it brings will be endless unless you break it.
Another sign of credit card addiction is when the person applies for more cards as the current cards are not enough to sustain the spending addiction. They will also tend to hide their card applications from their partner and family out of guilt.
If you’re overwhelmingly reliant on credit cards and do not know how to get out of this vicious cycle, there are ways to break the addiction by asking for help. If you can’t do it alone, reach out to AKPK Malaysia for their financial counselling and debt management programme.
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