5 Reasons: Only Use Credit Cards in Case of Emergency
You might be thinking, “It’s my card, why can’t I do what I want with it? Is there some real good reason for my reading this blog?”
Reason No. 1: The debt vacuum
Ask any person or family who has gotten themselves deeply in debt how it happened, and they are likely to tell you that it occurred so quickly that they don’t know exactly when it began.
This answer is partly true. And partly false.
How can that be? you wonder.
Debt can start off innocently. What do I mean by that? Let’s look at a few common scenarios and see if you can tell when the debt vacuum begins.
You are at the grocery store. You have $95 to spend on groceries for the week. You have kept track of your costs using a digital calculator. The total so far is $89.24. This leaves $5.76. You feel good about coming in under budget at the grocery store. Suddenly you feel the urge to splurge. You turn your cart down the temptation aisle. Suddenly, you pick up a package of something you want. In the checkout lane you are surprised to learn that you have spent $108.89.
You are home watching tv. The computer store is having a sale on laptops. You think about your old model. It works, but you could do so much more with the new model they show you on the screen. You stop by the computer store after work on Wednesday. The sales person is sweet and helpful. Before you know it, you are walking out of that store with your new laptop and 5-year extended warranty.
You are on your way to work. Traffic slows down. You have time to look around. Almost every car you see is newer than yours. Nice shiny paint jobs. Sporty wheels. You imagine yourself driving to work in one of those. On your lunch break, you search local car dealers from your phone. Just for the heck of it, you drop by the place on Saturday morning. The lot has balloons and large colorful signs everywhere. You talk to a salesperson. Before you know it, you are sitting at a sales desk talking numbers. Then you are ushered into the finance person, who smiles and says, “you’re just in time!”
Reason No. 2: The Invisible Expenditure
You shop. You get to the checkout. The terminal asks how you are going to pay for your purchases. Credit or Debit? Sounds typical, right?
Want to know what is atypical?
Upon arriving back home, you sit down with your digital device (or pencil and notebook) to log in today’s charge to your monthly credit card running balance.
Do you wait until you get your credit card statement to let the current balance surprise you?
Reason No. 3: It’s a Habit
What’s a habit?
A habit occurs when we do something repeatedly. Some habits, like saving a certain percentage of take-home pay are good habits. However, some habits are not so good.
Using a credit card can be one of those not so good habits, especially if you fail to keep track of where your balances are regularly. Allowing yourself to be surprised at the end of your credit card billing cycle is not a good thing.
People who previously had been paying their credit card balances in full each month – when they are due – have run up credit card balances that are impossible to pay in full each month. Or they’ve slipped into paying only a portion of the balance because they use their credit card(s) without connecting that behavior to a resulting consequence.
Reason No. 4: It’s a Dangerous Cushion
You may not even realize that you are using your credit card(s) as a cushion.
What do I mean by that?
If you have ever caught yourself thinking or saying things like:
“I know I can’t afford it, but I can always put it on the credit card and pay for it later.”
“I’ll just put this purchase on the credit card and worry about it later.”
Let me say this, this kind of a cushion is one filled with big rocks. It’s not a comfortable place to be.
A better cushion is an emergency fund. Money you saved up so you don’t have to use your credit card.
Reason No. 5: It’s What You Are Teaching Your Kids!
This topic is perhaps one of the most important warnings of all. Why do I say that?
If you are willing to become aware of your money mistakes now, you can take two successful steps. The first is to correct your blunders with money. The second is that you can teach your children about how to handle money properly and be financially prosperous.
Would you agree with me that this is a pretty big deal?
Take control of your money so you do not get sucked into debt.
Make every expenditure visible. Keep track of daily and weekly purchases.
Analyze current credit card habits and replace them with good habits.
Start saving today for purchases that are not emergency requirements.
Ask yourself: Do I want my children using credit cards the way I do?
Thank you for listening.
Resource No. 1: There is a resource for you on my blog page!
Resource No. 2: Article below.
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