Credit Cards - my view
Credit cards are only a convenient way of paying for something. They can serve as a means of having money at our fingertips without having to put our cash out where everyone can see it.
Many people use those plastic cards as a way of giving themselves a loan. This is an approach that will lead to failure. I guarantee it. Giving yourself a loan with a card designed for credit transactions isn't good money management - it's a good way to get into debt quickly.
Many years ago I was talking with a woman who was facing unemployment. She had little savings and no immediate prospects of work. I asked her what she was going to do. She explained that if she depleted her savings, "Well, there's always the credit cards." Wow! What an amazing statement. I think debt was in her future.
My view is simply that "plastic" is a convenient way to avoid carrying cash or writing checks. The balances on the accounts must be paid in full each month – no exceptions.
If you adopt this concept, then getting out of debt is much easier, because you'll likely avoid getting into it in the first place. Again, Benjamin Franklin has something to tell us:
An ounce of prevention is worth a pound of cure.
Looking at my credit statements each month and some of the offerings of the credit companies can tell a lot about the dangers ahead. I had a $2,300 statement recently, and they offered me a minimum payment of $15. That's like paying back a friend $1.53 by making one penny payments each month.
It’s clear that credit companies want you to get hooked on minimum payments and become their slave for many years to come. I choose not to be enslaved. It's a good choice.
For emergencies when you don't have cash and checks aren't accepted, having a card is a good idea. I've never had more than one card that I was actively using at any given time. Those with more than one card are just asking for trouble. They're asking to fill up one card and then move on to the next.
One of the great dangers of using "plastic" is that your purchases are largely invisible to you until you get the statement sometime the next month. Those $20 here and there purchases and the occasional $115 purchases will soon have you at $1,000 in no time at all.
If you make careful decisions regarding what you buy, it shouldn't matter if you use cash, check or credit cards. The problem is that most people don't make such careful decisions, especially when it comes to those "plastic" purchases.
Done with Credit Cards, back to Mindset of Frugality