Credit cards are dangerous, especially for new credit card users who may be interested in what seems like “free” money. Some credit card users fall into credit card traps. If you're thinking about getting a credit card, understanding the dangers that credit cards pose can help you develop better credit card habits. Studies show that people tend to spend more when paying with credit cards compared to cash. One study showed that people were willing to spend up to twice as much when using credit cards compared to cash. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay It's easy to spend money on a credit card and not feel the money leave your wallet. You can avoid this by setting a spending limit with your credit card based on how much you can afford each month. Try not to spend too much. According to the American Bankers Association's June Market Card Market Monitor, only 29% of people pay off their balance in full each month. When you don't pay off your balance in full, part of each payment goes toward paying interest, which increases the amount of time it takes to pay off your balance. Adding credit cards to your spending methods makes it harder to track your spending. Especially if you use credit, cash and debit cards. A credit limit should not be viewed as free money to spend. If your card's credit limit is $2,000, you shouldn't plan to spend $2,000 that month unless you can pay that amount. Even if you can pay off your balance in full, your credit score will drop if you use a high percentage of your limit. Payment history is an important factor contributing to your credit score, and missing payments can have a negative impact on your score. When you fail to make payments, you will typically be charged a late fee and a penalty may be applied to your account. Late payments may be reported to the major credit bureaus if the delay is more than 30 days. This could be on your credit for up to seven years. If you carry a balance over to the next month, you could end up paying a large amount of interest. Credit card interest rates are high. When you apply for a credit card, the credit card issuer checks your credit report, and this check appears on your credit report. This check can lower your credit score by a few points. You shouldn't let this worry you if there's a specific credit card you're looking to get. But you may want to avoid applying for credit cards you don't need. Works Cited Manning, R.D., & Huffman, S. (2019). Credit Card Nation: The Consequences of America's Credit Addiction. Basic Books.Munroe, R. (2020). Credit Card Debt: The Hidden Dangers and How to Avoid Them. Independently published. Norvilitis, J. M., Merwin, M. M., Osberg, T. M., Roehling, P. V., Young, P., & Kamas, M. M. (2006). Personality factors, money attitudes, financial knowledge, and credit card debt in college students. Journal of Applied Social Psychology, 36(6), 1395-1413. O'Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005). Personal financial knowledge, financial attitude, and financial behavior among high school students. Financial Services Review, 14(4), 307-328. Passmore, W., & Lusardi, A. (2015). The financial capability of young adults: An investigation of financial literacy and financial behavior of.