Using credit cards to fund your life is not something I recommend. But like so many, you may believe the credit card lies disguised as truth, keeping you in perpetual debt and struggling financially.
Personally, I think credit cards are not a necessity like so many others do. I’ll get to that later in this post.
It's Easy to Tell Yourself Lies About Credit Cards
However, if you’ve made up your mind that you just have to have a credit card, here are some common lies you’ll tell yourself, and the mistakes you’ll make when it comes to using those cards that ensure that you stay in perpetual bondage to your debt, just like the credit card companies want you to do. Your best bet is to avoid debt no matter what.
Lie #1- I’ll Get a Cash Advance Just This One Time
Dealing with immediate financial issues? Getting a cash advance is a great solution! Sure, the credit card company charges a fee for that privilege and they’ll raise my interest rate, but I need cash now! I’ll worry about all that extra stuff later.
Lie #2- I Hate to Look at My Statement
What am I some kind of accountant? Who wants to look over all those numbers? I don’t totally understand it, and besides, it’s just depressing. Never mind that I got double charged at that restaurant and some hacker got my info and bought $500 worth of Star Wars memorabilia on Ebay.
Lie #3- I Can Afford the Minimum Payments
I’ll only pay the minimum payment because that will keep me current. As long as I can afford the minimum everything is ok, right? Never mind the fact that if I keep paying only the minimum it’ll take me decades to pay it off and I’ll spend about 4 times more than if I had used cash; and that’s only if I quit using the card now.
Lie #4- I’ll Use a Credit Card to Get Rewards
I know that airline miles and rebates are just enticements to get me to use the card more, but I’ll game the system and use it to my advantage, because I’m smarter than those people at the credit card company. Besides, I need a plane ticket for my vacation this summer so I can relax and forget about all of my debt problems!
Lie #5- I’ll Never Make a Late Payment
I’ll never put it off because there’s not enough in my bank account to pay the payment. Anyway, if it’s the end of the month and I’m out of money, I can just pay that payment with my other card that has a later due date. Problem solved! And of course, I'll never miss the deadline because I forgot either.
Lie #6- I’ll Never Exceed My Credit Limit
At least not for a good reason. Only if I have a real emergency or they’re having a blowout on those awesome shoes I want. That’s an emergency right? All those extra fees and an increased interest rate would be sooo worth it to have my feet in those cool shoes.
Lie #7- I’ll Only Use it For Emergencies
I’ll keep it handy just in case an emergency happens, only if I absolutely have to use it. That’s good, until you’re a little short on cash for that thing you really need, whatever it is. Then you break down and use it “just this one time”. Yeah, right.
You Need a Plan
Using credit cards to fund your life is usually indicates a lack of planning. That means making a budget and having a plan to eliminate debt.
I wrote a short, easy to understand book on how to do a budget that works. You can check it out here.
If you're ready to change your financial life in a really big way, you can take my online get out of debt course. You can learn more about that on the course home page.
The Truth About Credit Cards
If you use credit cards long enough, eventually you will probably use one or more of these credit card lies on yourself, digging you deeper and deeper into a pit of debt that keeps you perpetually enslaved to the credit card companies.
I used to tell myself these same credit card lies when I was using plastic to fund my life. I also made some of these same mistakes, but finally I woke up and realized that using credit, no matter how well you do it, always puts you at a disadvantage. Using cash is always the better way to go.
Even if you use credit cards and never incur a fee and never carry a balance, studies show that the transaction is so easy and frictionless that you still end up spending 12% more than if you had just paid cash.
Let’s face it, credit cards are for suckers and they are marketed so well that we begin actually believing the lies. We tell ourselves how “responsible” we’ll be when using them. But when it comes down to it, the most responsible way to use a credit card is not to use one at all (here are some alternate uses). You shouldn't have to live paycheck to paycheck and just get by in life!
Question: Have you ever told yourself any of these credit card lies? Tell me about it in the comments.