Back in the day, I always associated credit cards directly with debt. If you had a credit card, you were in debt. If you didn’t have a credit card, you were wealthy.
During my journey, I learned the real truth about credit cards.
Credit cards are simply a form of payment – the same as cash, checks (for us older folks) and debit cards. That’s it – plain and simple. The feature of credit cards that is our downfall is the fact that the bank they are issued through gives us a special “limit” that they will allow us to spend without them saying “no more”. This is where people, and I was one of those people, turn a simple credit card into debt. We make purchases with an intention of paying for it when the bill comes, but when it comes, something new has come up and we can’t pay in full. And after a few months of this, we find ourselves on the hamster wheel of debt and paying interest.
Here is the truth about credit cards – credit cards have great benefits if they can be used as intended, as a form of payment. This means that you pay for something using your credit card and once a month, you make one payment to the bank, paying the bill off in full. This is what I do with all of our monthly bills. They all go on one card I have – a Disney Chase card – and once a month, I pay it in full. This has several benefits: Disney points to use on our vacations, one payment per month instead of multiple and it automates all of my payments, giving me one due date instead of 12.
For many years, I was unable to use a credit card as intended. And in the process, accumulated a butt load of debt. When I paid the debt off, I still shyed away from them because I never wanted to go back on the hamster wheel again. Once I knew, for sure, that I could use a credit card as intended, I decided to take advantage of the benefits.
Here’s the moral of the story – if used as intended, as a form of payment, a credit card can be beneficial. However, if using a credit card is causing debt in your finances, then stop using them immediately. It’s not about the card – it’s about how it is used.