Day 18: The Credit Card – It’s Not For Everyone

Credit Card Debt? Bad all the time.

But the Credit Card? Use at your own risk. It’s not for everyone.

After a few blunt posts on the evil of credit card debt and my pleas to avoid it at all costs — I’m going to confess. Sometimes you need a credit card to get ahead in the financial world.

Here’s what I mean: Having a credit card isn’t bad, in my opinion. (Now, Uncle Dave definitely disagrees with that, but that’s where we differ). Whether you like this or not, our society places a great deal on the credit score. With a high credit score, you can save yourself a lot of money in deposits, get lower interest rates on car or home loans, and sometimes it may affect whether or not you get a job.

And herein lies the challenge: In order to have a good credit score, you have to have a credit card, and when you have a credit card you’re tempted to go into debt, and when you get into debt, it lowers your credit score.

My head just hurt writing that sentence.

The point is! Know thyself! I think having one on hand is fine, as long as you tread carefully. Credit cards need to scare you a little bit. And they should scare you — that amount of power in your hands to purchase essentially anything you want at your fingertips is real. It’s not free money, but it sure feels like it sometimes. So a little fear of them is healthy. If you’re tempted by the credit available at your finger tips? Cut it up. There are other ways to establish credit.

J and I use our credit card for almost all of our purchases. It’s safer than a debit card, because we can refute any of the charges and it doesn’t affect our checking account at all. It also allows us to accumulate points and with those we have been able to pay for so many unexpected gifts for others and ourselves. We pay it off every 15th and 30th of the month, regardless if the balance is super high or super low. It’s got to be zero by the end of those days or else we are doing something wrong and are getting too comfortable with having a balance, while also we can get cash back sometimes as we learn we can Earn cashback with Tail that is a great app for this.

So, what do you think? Credit cards – to use or not to use? Do you use a credit card on a regular basis or avoid them? 

This is post #18 of a 31-day series on Financial Freedom. Click here to see the entire series. And thank you so much for reading!

(photo credit)

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  • I use my credit card for all purchases that I can, and write in my costs in my budgeting program that night, so I can see how what I purchased is affecting my bottom line and my budget. I pay it off every month in fully, and I too get points for my card – I’ll be purchasing 90% of this year’s Christmas gifts with my rewards!

  • I am loving your 31 days series. My Husband and I are still on the road to being 100% debt free so it’s always nice to see the journey from a fresh perspective.

    I wanted to share a story of ours about credit cards. We recently went over our credit reports and finances through a service offered at our bank. She praised our scores and low interest rate on the house, then she said, “oh, I do see one problem, you have no revolving credit.” She asked if we paid our cards off monthly and we said that while we have two cards we only use one and yes, we paid it off monthly. It had taken us 3 years to be credit card debt free (and down to two well thought out cards) and we weren’t about to go back down that road again. She suggested keeping a balance on a card to show we could make monthly payments. I told her I didn’t agree and that we did make monthly payments, on our house and a car. To us those payments are enough. She was very shocked that we just flat out told her no on credit cards. She pushed that “everyone has them” everyone has card debt” – well we don’t, we’re weird and that’s fine by us.

  • I use credit cards instead of my debit card about 90% of the time. However, I only have two, and that’s because I keep a strict eye on what will give the better bonus since both are cash back cards. Even better, one of them is cash back or money off at Amazon, where I buy a lot of my staples like batteries, tea, and stuff like that, so it helps offset my normal costs too. However, I make sure I pay off my balance EVERY MONTH, and when you don’t do that, that’s where it’s easy to slip.

  • I’m kind of shocked that a financial adviser would tell you to keep a balance on a credit card… That’s completely unneeded (especially since you’re making home and car loan payments) and sounds so fishy. Maybe she was trying to sell you that bank’s credit card.

  • I also get a lot of money off at Amazon, and it’s really amazing what you can buy on there! We buy almost all of our gifts for others on there!

  • Yes, I agree with Tiffany — banks get commission on credit card sales, so I am sure that’s why she gave you that advice. Sounds like you guys are making all the right choices, so keep doing what you’re doing! And I’m so happy to hear you’re enjoying the series. :)