3 things your credit card is not – and 1 it is

by Kristina Tahnyak on January 26, 2015 · 11 comments

Do you love your credit card? It might be time to break away! Here are three things your credit card is not.

Good morning Dinks.  How do you feel about your credit card?  I love my credit card…now.  Now that I’ve paid off over $50k in debt my credit card is no longer a crutch and I love it.  Yes, it’s true I used to abuse my credit card and let it abuse me.  Thankfully I’ve grown out of that bad behavior and learned from all my past financial mistakes.  Past mistakes like shopping every weekend with my credit card, taking my credit card out to dinner and not paying it off in full after a glorious day together.  Yes I used to date my credit card.

Even though I no longer have bad spending habits I’m still tempted to use my credit card every time I walk by a window and see a warm sweater or at night when I’m hungry and want to order in food.  Every day is a struggle and I have to keep reminding myself that my credit card is a lot of things, but it’s no longer my financial dependence.

A credit card is not your best friend

I used to wake up on Saturday mornings, grab my credit card and go shopping.  When I first moved away for college I had no friends and nothing to do.  So what does a girl who lives alone in a new city do when she has nothing to do? Shop and spend money.  I didn’t have anyone to call and hang out with so I spent many days and several thousand dollars strolling around town hand in hand with my credit card.  I was living in the moment and I wasn’t thinking about the future impact that overspending would have on my life.

It’s not your happiness

Being alone is lonely; but I was happy as long as I had my credit card.  I became so dependent on swiping my credit card that I couldn’t go a day without buying something.  How sad is that?  Now I buy myself something nice once a month as long as it’s on sale and as long as I have cash.  I spent money on anything and everything I wanted from candles to new furniture.  I lived day to day – emotionally and financially.  I didn’t think about repaying the debt or getting a bill in the mail at the end of the month.  Buying things made me happy and that’s all that mattered.  When my credit card was maxed out I applied for another one and that’s how I ended up over $50k in debt.

It’s not an emergency savings fund

I never saved money because I had a credit card.  If I wanted to go home to visit my family and friends for the weekend I would charge it to my VISA.  If I couldn’t pay my rent one month (several months) I would just hit up the ABM and take a cash advance.  Yes that’s how I used to live.  However I’ve grown up and come to realize that a credit card is not an emergency savings fund.  Just because you have a credit limit doesn’t mean you have to spend it.

A credit card is your financial life

I know that sounds extreme.  Take it from me because I know firsthand that money doesn’t buy happiness, but it does buy financial ruin.  I didn’t know just how bad having bad credit can mess up your life but it does.  We’re talking total financial dismay from not getting an apartment to being fired from your job as a financial planner.  That’s why it’s always smart to use your credit card wisely.

{ 6 comments… read them below or add one }

1 Brock @CleverDude January 26, 2015 at 8:18 am

“That’s why it’s always smart to use your credit card wisely.” <— OR not use it at all!

2 Joseph Hogue January 26, 2015 at 12:25 pm

Just remind yourself you don’t want to go into consumer debt. If you’re buying something, you could pay with cash or a debit card. A lot of discipline goes into managing a credit card and kudos to you for not letting it be a crutch anymore.

3 Vivianne January 26, 2015 at 2:57 pm

I finished my garage, I had a budge for it. And the fund for it. I still put it on the credit card to earn points. You got to be responsible. If they teach personal finance from middle school up, I’m sure Americans will do better. A lot of people are speaking out about public schools and the SOL, but I feel like when our standard is too low, it’s the rich that will keep getting richer, and the poor got stuck with no education.

4 Mike January 26, 2015 at 5:44 pm

So true. Credit cards aren’t your friend. They are one tool in a tool box of financial products that should be used to reduce your risk. For example, credit cards can provide added consumer protections you may not get elsewhere.

5 James January 28, 2015 at 12:57 am

Ugh – better just to avoid credit cards all together.

6 Kristina January 28, 2015 at 7:47 pm

@ Brock – Yes I am starting to think that not using them at all is probably the best way to go but that’s not helping my credit score.

@Joseph – I couldn’t have said it better. Self control is the key to using credit wisely, something I didn’t use to have. Thank goodness I grew up and now I can talk myself out of getting into debt.

@Vivianne – I love that. Putting something on your credit card for the rewards is a great idea. So you redid your garage and got cash back or travel rewards as an added bonus. Brilliant.

@Mike – No they are not. I do like my American Express for the added warranty protection and travel benefits but I only use that card for travel. It has a pretty high limit and I can’t take the risk of getting into the “I’ll pay it off later” cycle.

@James – I wish I could just cut them out but I try to buy at least my groceries once a month on the card just to keep it in good standing. My bank just offered me a pre approved credit limit increase so I guess I’m doing something right. I respectfully declined.

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