3 reasons credit cards suck and what to do about it - Finness Advisory

3 reasons credit cards suck and what to do about it

I’m not going to lie to you, I hate credit cards with a passion!

When the average interest rate for a home loan is sitting at a paltry 2.5%, credit card providers are still charging 20%.  Yes, SERIOUSLY 20%!

And worse still, the rate has not changed when interest rates have plummeted. It’s a joke!

Cop this… there’s more than $30b in credit card debt in Australia at an average of 19.94% (let’s just call it 20%) interest rate and $20b of that debt is from accumulated interest. So the debt is not being repaid.

The average balance according to www.finder.com.au is $2,430 with;

  • GenX’ers average at $3,274,
  • Millenials $2,674 and
  • GenZ’s bottoming out at $1,571.

Here’s my three reasons why credit cards suck;

  1. The interest rate is offensively ridiculous
  2. Frequent flyer points are expensive too
  3. Annual fees often apply on top of the offensively ridiculous interest rates

Now, credit cards serve their purpose and particularly for business owners because it allows you to track your expenses easily and even accumulate travel points.

Travel is that thing we used to do before someone ate a bat. Remember?

Credit cards also allow you to be able to move around without carrying clunky cash and they’re great when travelling overseas, although expensive. (Refer bat comment above.)

My suggestion is to cut up your credit card.

…But wait until just after you apply for a Debit Card.

Debit cards provide all the convenience of credit cards without the interest rates, allowing you to spend only what you have.

Debit cards are great because you can still track your expenses and link them to your online accounting system but you don’t pay offensively ridiculous interest rates, penalty rates or high annual fees linked to expensive frequent flyer points.

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