How good is your credit score? Do you even have one? If you reside in the US, then you definitely know how important it is to build credit. The promises of bonuses, points, or miles make credit cards an attractive commodity, but if mishandled, these cards can turn out to be your worst nightmare.

If mishandled, credit cards can become your worst nightmare

Are you a good financial manager? Making smart financial decisions (especially on matters of credit) is the hallmark of being a responsible adult. If you’re yet to get the hang of it, here are a few signs you should look out for. If they apply to you, then you should start distancing yourself from credit cards.

Making Minimum Payments

Is your card balance creeping up on you? One of the most common reasons why this happens is that your monthly payments never exceed the established minimum amount.

In a perfect world, you’d want to be paying off your entire balances each month and thus avoid interest charges. Unfortunately, the world isn’t perfect, and neither are you. It’s worse for you though, because you aren’t even trying to be better.

By paying off just the minimum amount every month, you are all but signing the “I’m willing to pay the interest” contract willingly, without even being under duress. Another thing, minimum payments tend to be the telling signal of an individual who spends more than they earn. Do you need a reminder of just how slippery a slope you’re on? If this just so happens to be your case, then credit cards are certainly not for you.

Missing Payments

Missing a payment is worse than making minimum payments

Missing a payment, or even being late on one for that matter, is obviously worse than making minimum payments. For starters, your provider will definitely hit you with a penalty. That, needless to say, is already an addition to the amount you previously owed.

If making minimum payments hadn’t convinced you of your inability to manage your credit, then missing a payment should. Looking at the bright side, giving up your cards will only work out better for you in the end.

Already in Debt

If you don’t have a credit card yet but have a mountain of other debts to clear, then taking out a card wouldn’t be the smartest move you can make. Why get yourself into more debt knowingly?

If you are already in debt due to a car loan, don’t get a credit card just yet

The thing with borrowing is that it can become a pattern, and you have to be careful and watch out for the warning signs before you become a perpetual borrower. If the mortgage, student loans, or car loans are breathing down your neck, don’t rush into taking out a card just yet. And while we’re on this topic, don’t also rob Peter to pay Paul. It’ll only become an unending vicious cycle.

Unsure of Interest Rates

Do you really know how much interest your provider actually charges on your card? You probably don’t, and you aren’t the only one. Card companies bank on the fact that customers are ignorant of the interest charged, and before you know it, you have a hefty balance.

If you don’t understand your provider’s APR (Annual Percentage Rate), it’s best to do without the card altogether.