Credit Card Debt? Bad all the time.
But the Credit Card? Use at your own risk. It’s not for everyone.
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.
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!