Optimal Finance Daily - Financial Independence and Money Advice 3206: 6 Types of Credit Cards You Need to Avoid by Kumiko of The Budget Mom on Financial Security
Jul 9, 2025
Beware of credit cards that seem enticing but can lead to financial peril. Learn about deferred interest schemes that can trap you in debt if you can't pay off the balance in time. Discover the risks of secured credit cards tied to your home, which could put your family's shelter at risk. The discussion highlights the deceptive nature of predatory lending practices aimed at vulnerable consumers, emphasizing the importance of staying informed and protecting your financial future.
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Avoid Deferred Interest Cards
- Avoid deferred interest credit cards if there's any chance you can't pay the balance by the end of the promotional period.
- These cards charge retroactive interest on the full purchase if not paid off on time.
Avoid Purchase-Secured Cards
- Use unsecured credit cards rather than secured cards that take collateral on purchases.
- Secured cards letting lenders repossess bought items pose extra risks and should be avoided.
Beware Bank Account-Secured Cards
- Avoid credit cards secured by your bank account to keep your funds accessible.
- Only use such cards if you are confident in making payments and paying off balances monthly.