Top 3 Dangers of Credit Cards


While credit cards have the opportunity to provide great benefits, the dangers may often outweigh them. And the biggest issue is that many are not aware of the all the downfalls until it’s too late. Credit card balance carried from month to month continues to increase, reaching $423.8 billion for the U.S. early this year, which is already up 5% from 2018. Carrying a balance can have a huge strain on your finances, and credit card debt has higher interest rates than any other kind. So before you decide to apply, keep in mind the risks, and consider some safer alternatives. 


1. Debt Grows Fast 

Credit cards hold tremendous interest rates and annual fees. It’s not uncommon for some companies to charge 20% or more. If you’re unable to pay off your balance in full each month, it can quickly grow too large to ever keep up with. The most common mistake consumers make is only making the minimum payments each month. When you’re already in thousands of dollars of debt, doing this will make it impossible to ever completely pay off the balance. 


It is possible to avoid this risk with mindful spending. You can learn more about how to start reducing your credit card debt with TLC here


2. Large Damages to Credit Score 

Both credit utilization ratio and missed payments have a large impact on credit score. Credit utilization ratio is how much revolving debt you have, including what you owe on your credit cards, compared to how much available credit you have. The higher the ratio, the more it impacts your overall credit score. According to, 30 percent of your credit score is based on your credit utilization ratio. 


Missed payments can have an even tougher impact credit score, as payment history is one of the biggest contributing factors. One late payment not only results in a late fee, but can also decrease your score by 100 points or more. Late payments remain on the three major Credit Bureaus’ (TransUnion, Experian, and Equifax) reports for seven years. Setting up automatic payments is one way to prevent this from occurring. You won’t be responsible for remembering to make payments, just making sure there are sufficient funds in the account. 


3. Prohibiting You from Saving 

A financial safety net is essential to protect you from large unexpected expenses. If a major and necessary cost pops up, you want to be able to pay for it without having to cut other basic necessities. It can be difficult to build this kind of savings when you have to make thousands of dollars in credit card payments at the same time. 


Some even mistakenly believe they’re putting money away for things like retirement, when the money really isn’t theirs. If you have a large outstanding debt, that savings actually belongs to the credit card companies. It’s even possible for your wages to be garnished if you fail to pay your debt. While you can’t go to jail for not paying off your debt, credit card companies can still sue. If they win, they can garnish your wages until you pay back all you owe. 


Why You Should Consider a Personal Loan 

A personal loan can be a much safer option to opening up a credit card. For those unfamiliar with personal loans, they work much like auto, mortgage, or student loans, but you’re generally free to use it for whatever you desire. You can receive a personal loan from a bank, a credit union, or an online lender. You apply for your desired amount, and the lender uses your credit report and history to determine whether you qualify and at what interest rate. 


You can learn more about different kinds of personal loans here


With personal loans you generally have lower interest rates, fixed payments, and remove many temptations that come with credit cards. Since a personal loan is an installment loan, you get the money in one lump sum and make fixed monthly payments over time. The repayment period usually ranges from two to five years. Interest rates for personal loans generally range from 6% to 36%, depending on the borrower’s credit and the rates of the lender. And unlike a credit card, personal loans do not allow you to overspend or continue to borrow money. As long as you make on time payments, you know exactly when the debt will be paid off. 


Personal Loans with TLC 

At Total Loan Company, LLC the loans we make are as individual as the people who apply for them. If you need a personal loan, we can help. Application is quick and painless, and no need to worry about secret or hidden costs. With TLC you know exactly what you pay with fixed rates and absolutely no extra fees. You are with a reliable company that has 24/7 customer support and data protection. 


If you’re ready, apply here today. For additional information or if you have any questions, contact us here