I’m going to make some of you mad. That’s okay, I’ve done it before. HA! I’ve long been a proponent of using cash instead of using credit cards. I’m not very fond of plastic – I really only use my debit card to buy gas and to pay for things online. I don’t even have a credit card anymore – period. Am I afraid to carry cash? No. On a good day, a robber might get $300 from me. I usually only have $50 or less on hand, so I suspect I’m not a very attractive target.
Today I want to spend some time debunking several credit card myths – lies you’ve been told from the credit card industry (or your FAMILY). It is not true that you NEED a credit card to live. The only reason you need to establish credit is so that you can BORROW MORE MONEY! Is that really where you want to be?
Myth 1: I need a credit card for an emergency.
You do not need a credit card for emergencies…you need an emergency fund. Studies show that if you have that credit card, you’re going to use it. Also, you’ll spend more. Having a cash emergency fund causes you to be a bit more creative (aka – cheap) when it comes to dealing with “emergencies.” If your water heater goes out, you might buy a NEW one with a credit card…but if you were paying cash, you might ask if there was a scratch and dent available…or GASP, a used model.
Myth 2: I deserve it.
You what? You deserve what? If God gave us what we DESERVED we’d be in ROUGH shape. You don’t deserve much of anything. Work hard for it. Pay cash. When you can pay for it is when you deserve it. End of story.
Myth 3: The rewards are too good to pass up!
Play with this myth and you will lose. Credit card companies are multi-billion dollar businesses. These rewards won’t make you rich but one slip-up and you could be in a mess. You can do without those “rewards.” And if you don’t think that’s enough of an argument, how about switching to a debit card that also offers rewards – like Perk Street?
Myth 4: I can afford it.
Can you pay for that all at one time? No? Then you can’t afford it. Society has bought into the belief that being able to afford the payments is the same thing as being able to afford to buy, buy, buy. If you’re making payments, you really couldn’t afford it. End of story. Use cash…oh wait, did I already say that?
Myth 5: I pay it off every month.
Good for you. Then why are you using a credit card? Using a credit card causes you to spend more. It’s a fact. So, you’re spending more needlessly. I talk to so many people who have this mindset. Then they lose their job, get sick, or something unforeseen happens. BAM! They can no longer pay that card off. So the amount owed grows – the fees and penalties add up. I worked in the credit card industry and saw this all the time.
If this post made you mad, be sure to come back tomorrow for another. ;0)