A couple of weeks ago, I posted a status on Facebook asking if anyone had any suggestions for a good rewards program credit card. I was immediately flooded with responses from people who were quick to judge my intelligence and tell me I was asking for debt.
The title of this post alone is enough to make people want to throw knives at me. I can just see Dave Ramsey waking up in the middle of the night with a premonition that someone has brought about a disturbance in the Financial Peace force.
If you would put your weapons down for three minutes, I’ll try and explain why I am pro-credit cards. All I offer you, as with my other posts, is how I’m learning.
When I was 18, I got my first credit card. Until recently, it’s the only one I’ve had. I got some really good advice from a friend about how to use the credit card. I was told, “Only use it if you can immediately pay it off.” And that’s how I’ve done it for the past decade. I’ve never once missed a payment.
People say that credit cards promote debt and that if you get one, you will inevitably be in debt. While in theory, you will be “in debt” until it’s paid off, I don’t view it as debt if you have the money to pay it off. When I first got a credit card, I would just use it to buy gas. Now, since online shopping is much more prevalent, I use it for a variety of purchases and bill payments. Always keeping an eye on my bank statement. I check my bank account literally every day. I never make a purchase with my credit card unless I have the money to pay it off immediately.
People say that you’ll miss payments, and doing so will cause you to get charged interest. In 2014, there are no excuses for missing credit card payments. I have reminders on my Gmail calendar of when payments for my cell phone and health insurance and things like that are due. We have 100 billion dollars worth of technology staring us in the face every day. We can be reminded through a ton of different ways. There’s probably an app that reaches through the screen and punches you on rent day. If you’re missing payments because you forget, you need to get organized. It’s not your credit card’s fault.
People say it will cause you to spend more than you have and make stupid purchases. As with anything to do with money, you have to have self-control. A credit card is no more dangerous than someone with a wallet full of cash from the paycheck they just received. You have to use your head and spend wisely. Again, it’s not the credit card’s fault if you’re an idiot. You can’t quote The Crucible on them and yell out, “The devil made me do it!” (And you guys thought I didn’t ever read any literature in high school.)
Here’s the main reason I like credit cards: It builds your credit.
Wow. Did I just blow your mind?
It’s so simple, but it’s true. Making simple payments for gas or every day purchases can be greatly beneficial for you financially. If you’re afraid you’re going to spend too much, then don’t give yourself a big credit limit on your card. Cap it at a lower amount.
I know it sounds ridiculous to think, but I would give this advice to teenagers. Get a credit card and use it on gas and cell phone payments. A time will come when you’re going to wish you had good credit.
I sold my car when I was in DC thinking that I wouldn’t need a car for a few years. Then, I lost my job and had to move back to Florida. I had money saved up and needed a car to get around. I found a solid, used car and wanted to start making payments on it, and usually if you don’t have a job they wouldn’t dream of selling it to you. But because I have outstanding credit, they decided to sell it to me.
Money is always tricky and you have to do what works for you. Still, people stand in terror of credit cards, but what they really should be terrified of is their lack of self-control and poor spending habits.