Have you heard the radio commercial that says, “I have a deal for you! I’ll give you $100 if you give me $1000.” The commercial then goes on to say that this is essentially what you do when you agree to pay on credit. It may seem like a great, short-term solution, but in the long term, it can cost you many times the actual cost of the item. This is one reason why credit cards are a bad idea for frugal families. Here are a few more reasons why you should reconsider getting a credit card.

1. Temptation

One reason that credit cards are a bad idea is temptation. So often, people tell themselves that they just want a credit card for emergencies. Or they will only make small purchases and pay off the bill each month. These are great ideas, but in reality, it doesn’t often work that way.

Special occasions, irresistible sales or that “just this once” mentality occur, and the result is a maxed out credit card. You’ll find that you just can’t pay off that full balance; you can only afford the minimum payment when the bill comes due. Credit cards make it too easy to spend without consequence. Temptation strikes and you suddenly can’t stick to the promises you made to yourself.

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2. Setting Yourself up for Failure

Credit cards set you up for failure. All the hype about getting a credit card to build a great credit history is baloney. Read the fine print. The interest rate is insane, even on the better cards. An average rate may be around 14% but many are closer to 40%. So for every $100 you spend, you have to pay an extra $14 to $40 or more for the privilege. The fees are even more insane. Late fees, overage fees, monthly fees, annual fees…it really adds up over time. Suddenly the example at the beginning of this article sounds like a bargain!

You might think you won’t have to worry about fees, but it just takes one month of the mail running late and you’ll have astronomical fees added to your bill. If you have budgeted in just enough to pay off your bill, that extra fee can really throw a monkey wrench into your whole budget.

There is another little trick that credit card companies employ that can damage your budget. If you diligently keep up with your payments, they raise your credit limit. This sounds like a good thing, but really it is just a false sense of security designed to get you to spend more. The higher your limit, the more you spend and the higher your bill will be. Soon you can only afford that minimum payment and the interest builds. It won’t be long before you get more offers for credit cards and the next thing you know, you’re buried in debt.

Remember, credit card companies don’t want you to pay off your bill. The longer you take to pay, the more they make. If you get in over your head, that’s your problem. These companies are not interested in helping you. They don’t think about what you can afford; they think about how much they can make off of you.

3. A False Sense of Security

Credit cards really give a false sense of security. Many people erroneously look at their credit limit as their money. They think of a credit card as an asset. People who fall into this trap couldn’t be more wrong. The money you spend with a credit card is not your money. It is borrowed money that has to be paid back with interest. There is also the worry of someone stealing your credit card information and totally destroying you financially. With no credit card, you have no worry.

Far wiser is to learn to live within your means. Look at it this way: would you ask your friend or your parents if you could borrow money every time you want to buy new appliances, clothing or a vacation? Of course not! Yet that is in essence what you do when you buy on credit. It is logical to expect to borrow money to purchase something like a car or a house (though not always necessary), but to borrow for small purchases just isn’t responsible. Learn to pay cash or do without. Or, start to save for special purchases. That way the purchase will be even more special because it will be a reward for your diligent saving habit.

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4. A Bad Example

When you slide that card for every purchase, what do your children see? They see you getting something for nothing. It is much easier to teach your children to be responsible with money when they see it being used. Forget those ads telling you to teach responsibility by getting your teen a credit card. Giving a child a credit card, even with a predetermined limit, is like saying, “How fast can you spend $300?” He (and you) might be surprised to see that it can be spent within minutes, yet it takes far longer to pay it back. It’s just another marketing technique. The best way to teach fiscal responsibility is with cash.

Give your children $100 and have them figure out how to spend it wisely. Let them see how much is left after their purchase. Let them make a mistake and see that spending money just because it’s there is a fast way to have no money. Better yet, give them specific tasks to earn that money first. Teach them to think of how many hours (or tasks) it will take to earn enough for the item they desire. Is it worth working all week for a new pair of jeans? A credit card is too abstract for many adults! What makes you think a child can comprehend how it all works?

5. An Insecure Future

A couple of years back, the thought of a recession was the furthest thing from people’s minds. Then it hit and the country went into a panic. According to a recent report from TransUnion, average credit scores dropped by about 6 points during the first quarter of 2009. Now especially, it is a bad time to add debt to your family’s financial responsibilities. The more debt you have, the harder it is to make it through a financial disaster.

Those who have learned to live debt-free and within their means are not having nearly as much trouble in these tight economic times than those who have credit cards to pay off. They have the security of knowing they can get through tough times because they don’t have to worry about paying so many bills. If all you had was basic living expenses to provide for your family, how much better would you feel?