Credit Card Behavior

on Tuesday, November 22, 2011

First, let me say that you can choose to do whatever the heck you want to do.  This is my personal take on credit cards and I am not judging anyone.

My employer recently offered to help facilitate Financial Peace University for those interested.  Because I was one of the few who had already gone through the class, I was part of a Q&A session held for all of the skeptical accountants to figure out why in the world they would need to go through a class about personal finances.  Most of us make above-average wages and are nerdy enough to take care of this on our own.  The main thing that kept coming up was something to the effect of "Why on earth would I want to get rid of my credit card when I get rewards and pay it off every month?".

I would love to sit her and tell you that there's a mathematical reason for not maintaining a credit card, but there really isn't.  The bottom-line for me personally is that there are two reasons why I am against credit cards.

First, I don't want to ever be in a situation where I "need" to use a credit card and won't have the ability to pay it off.  I would rather have a large enough emergency fund to cover any unexpected and necessary expenditures.  Once you start the credit card debt train, its hard to get off.

Second, I don't want to be a part of a society where credit cards are "normal".  I don't want my children to think that its normal to finance a hamburger.  As soon as this practice becomes normal, you've started a habit that will be hard to break.  Humans are proving to be easily influenced.  I don't want to influence anyone (my friends, family and especially my children) to use a credit card who might not have the discipline to use it properly.  Just because I have the discipline to pay it off, doesn't mean my best friend does. I don't want to play with fire and I especially don't want my children/friends/family playing with fire either.

So I sat there, doing my best to tell educated people why using a credit card was stupid.  I know for a fact that most of them laughed and went about their normal lives.  I'm sure some of them will never see the dark side of credit cards and for that I am thankful.  But, for others, this gateway will be accessed one day and the airline miles to Jamaica won't be such a reward when you're paying 30% interest for a $2,000 car repair.

It's not a mathematics issue, it's a BEHAVIOR issue.


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