Should you get a credit card? The simple answer is yes and no. Not so simple eh?
Most people get a credit card to spend. In fact the average household, that carries a credit card, has a debt of around $8,500. 189 million Americans have credit cards and the average person carries 4 cards. The total U.S consumer debt is $13.86 trillion (source debt.org). That is a staggering figure. Considering current interest rates for a credit card is around 29%, the banks are making around $4 trillion in interest per year. No wonder they want you to have one!
Spending money is an addition. Credit cards fuel this addiction. The problem is you can’t go to rehab, go cold turkey or get medication to treat it. You still get that monthly bill to remind you to remind you of your monthly payment.
The problem with a card is that it doesn’t feel like real money. It’s easy to spend but difficult to pay back. Your credit card debt slowly increases and your monthly payment increases.
You use it to buy crap that you don’t need to impress people that you don’t like. You spend to impress. The latest iphone, a new computer, a watch, new clothes. Once you buy the item the novelty wears off after a few weeks or a couple of months. Guaranteed. But the monthly bill keeps arriving. Like clockwork. Guaranteed.
The temptation to spend is too great. Impress that girl or guy you’ve had your eye on. Sure, go ahead. Will they still be impressed when you show them your parents basement you’re still living in? Nope. If you’re using money, items, stuff to get a girl you need to ask me about relationship advice. I’ll save you a fortune.
Debt is a major cause of illness, depression and suicide.
Don’t do it. Seriously.
When you hear a voice in your head telling yourself it’s fine, you’ll pay off the balance each month. Don’t listen to it. You’re delusional. It never happens. Believe me, I’ve been there. Many times. You skip a month, then another and another. Debt is like a slow growing cancer.
It’s a piece of plastic, It doesn’t feel like real money. It’s too easy to spend. I don’t tell me you’re different, you’ve got will power.
There is only one situation and I mean only one situation where you should carry a credit card and that’s if you’re traveling. It can be used to buy that emergency ticket home because a loved one became ill. It can be used to get you out of a tricky situation if you get your money or items stolen. It’s not to be used on that splash out meal and bottle of fine wine at the end of the holiday.
Think about this. If you put money in the bank you’re getting a return of a fraction of a percent per year yet when you borrow money on a credit card you’re being charged 29% or more. It’s literally daylight robbery. The banks are winning big time at your expense.
Instead of spending someone elses money try earning more money, buy things you can afford and sleep soundly at night. Practice minimalism and don’t accumulate crap. Do some extra hours at work, change your job or better still start a side hustle.
Do anything other than go into credit card debt.
Here’s to you.
Disclaimer: I’m not a financial advisor, in fact you shouldn’t listen to me for any financial advice. I’m just a guy with experience and a bit of wisdom.