What Is Your Credit Card Teaching You?

In my blog post last week, I talked about how to use a credit card if you’re going to use one. 

Credit cards can be like playing with snakes. 

Remember, there is absolutely nothing that says you have to use a credit card. There are plenty of work arounds. Life doesn’t stop if you don’t have one. 

But if you are definitely sure that you want to use a card, then there is only one way to do it. And that is to make sure that you only spend credit card dollars backed up by real dollars sitting in your bank account.

But this week, I wanted to talk about the slippery slope that comes with spending with credit.

The problem is that credit cards allow you to spend way more money than you may actually have. They certainly allow you to spend more than you are intending. 

That’s why you have to draw your line in the sand of only spending on your credit card with budgeted money. 

But what happens is you start to get a little sloppy. Maybe you realize that it really wouldn’t be a big deal to make that purchase a little early. I mean, just put it on the card and then when the money comes in you can pay it right off.

And you start riding the float.

What happens is that you start using your card and your credit, not to simply spend the dollars that you’ve already earned so that you can earn the points. 

Now you’re spending money you haven’t actually made yet.

Now you’re spending your future dollars and you’ve started to slide down that slippery slope. 

What does a credit card teach you when you’re flexing your money paycheck to paycheck? 

Are you weathering storms and emergencies or are you learning how to overspend when you don’t have the money?

That’s the danger and the slippery slope that credit cards take you on. 

There’s not really a stopping point until you wake up and realize you’ve got credit card debt. 

What happens is that you just start getting used to creating debt. And that is where they get you. Now you’re paying interest and the small rewards they had to cough up to get you hooked are now paying off for them.

Credit can move south on you super fast. The only way you can maintain control is to create that line in the sand for yourself. 

Make it a hard and fast rule that you never spend money on your card that you don’t have. Ever. If it’s a rule that you keep in place 100% of the time with no exceptions, then you’ll never have to worry about breaking it.

And, for what it’s worth, you never get into credit card debt using your debit card.

Jared