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How to Really Use Your Credit Cards
Credit cards are a double-edged sword. People are addicted to the plastic crack. They buy stuff they don’t need to impress people they don’t like. Plastic money has Americans hooked. Advertisements for cards are everywhere. How bad is it? According to some statistics, the average American household has over $15,000 in credit card debt.
I do not advocate that everyone should have a credit card. If you can not control your cash you definitely can not control your plastic spending. I teach Financial Peace University classes and we strictly preach debt freedom and get rid of your cards. Why? Because most people will spend when they carry a credit card. Furthermore, those same people will not pay off their current charges and carry a balance. Thus putting them back into credit card debt.
There is a myth that you need credit. That is a lie. You don’t need credit to survive. It does make it easier to travel, rent cars, and book hotels. But the truth is you can do that with a debit card. The buy now pay later syndrome is why so many people are in debt. This is how people get trapped and are on the path to financial disaster.
Only The Responsible and Disciplined
I use my cards every day. But I pay off my balance every month. Paying interest is not smart. I still think that most people should not own or use a credit card unless they are responsible and disciplined to pay it off every month. As I mentioned earlier if you can’t control your cash you will do worse with credit cards.
Hear me out again. Paying interest on things you buy is just foolishness. If you can’t pay off the balance do not buy the darn thing. Do you really need it anyway? Is that new big screen necessary now? Or is a happy hour that important? Think before you pull it out. Better yet leave it at home.
Not For Emergencies
They shouldn’t be used for emergencies. This is an excuse that people use because they are not financially ready. What are emergencies? The tire blew out, the air conditioner doesn’t work, kids need new shoes, and you are hungry, and broke. You pull out your plastic to pay for these things and then you start to rack up that balance. You fail to pay the balance and the next month another “emergency” pops up. If you don’t have an emergency fund then you are setting yourself up for failure.
