Credit Cards Aren't Evil
I hope I don't get blacklisted from the personal finance community for writing this, but I have to confess: I use credit cards. And I am not ashamed of it.
Now before you start leaving me nasty comments about how credit cards cost you money in fees, cause you to overspend, cause you to go into debt and lose your home and car and dog to repossession, etc., read on.
My Credit Card Situation
I only have one real credit card. In fact, it is one of the best credit cards, in my opinion. It is a Chase Freedom Mastercard. It offers some great rewards/rebates, which is why I use it. (Regular readers know I have recently gotten pissed off at Chase Bank for the last time, but I separate their credit card business into a different category than their banking services.) 95% of all my purchases are made with this card. In addition to my Chase freedom Mastercard, I also have an ATM card that is tied to a major credit card label. I only use this card for shopping at Aldi (they only take cash or ATM cards) and making transactions through the ATM at my bank. But it is nice to know it can be used as a credit card if my main card becomes lost or stolen. I carry very little cash, so if you have any designs on mugging me I am afraid you will be very disappointed!
My Credit Card Rules
Using a credit card works for me. But, like most things, it is important for me to use it responsibly and follow some basic ground rules. Here are my rules for using a credit card:
1.) Pay the card off in full each month. This rule is non-negotiable for me. I refuse to pay a penny in interest charges. Ever.
2.) Use the card for convenience, not for a loan. Any time I use my credit card I know that I have enough cash sitting in my bank to cover the purchase. I use the card for my convenience. I do not use the card as a loan or as a way of spending money I do not have. If I don't have the cash to back up a purchase, i don't make it. it is a simple rule that, sadly, many people don't follow.
3.) Weigh the pros and cons of each purchase. Many people, including financial expert Dave Ramsey, believe that we spend more when we pay with a credit card. This is because the money we are spending doesn't seem "real" to us when we pay with plastic. Therefore, it is important you carefully weigh the pros and cons of making each and every purchase to be sure that you are not spending money frivolously.
Do you use a credit card? Why or why not?