Tuesday, July 9, 2013

The Great Credit Card Debate

Actually it wasn't that great and the only debate going on was inside my head, but over the past few weeks I have been wanting to apply for a credit card.  I think it was because every day that I was working, I was seeing people with massive amounts of cash buying in for poker games and all of them seemed to have a wallet full of credit cards (of course, some of that cash could have came from their credit cards but I digress...).  It seemed like the "cool" thing to do--the adult thing to do--to have a few credit cards in my wallet.
I haven't had any credit cards for a few years.  At that time I was in debt, I found Dave Ramsey, and I promptly cut up my credit cards, paid them off, then cancelled the accounts.  Back then I felt all cool and impressive and grown up when I flashed my collection of credit cards (I had nearly 20 cards by the time I was 19 years old...I was also deeply in debt for YEARS).
So one side of the debate, the reasons FOR applying for some credit cards, were:

  • I could use them in the event of an emergency
  • I could carry some "status" cards like American Express that would show how "cool and impressive" I am
  • I could earn air miles, cash back, and other perks when I use them
  • I could build up my credit score

Basically those were all of the reasons I could think of to have credit cards.
But on the other hand, some of the reasons AGAINST getting credit cards that I could think of (to myself, in my head...really my head is a busy place!):

  • If I have an emergency, getting into credit card debt would only create more problems (although the use of the card would temporarily give me some money, I would then be in DEBT and could end up struggling to pay back the debt)
  • If I have a real emergency where I needed cash I can take cash from my savings/emergency fund.  For a bigger emergency, I could easily borrow a large amount of money from a few friends and relatives (I know mixing money and relationships is a really BAD idea but there are a few people who would loan me money if needed)
  • If my self esteem depends on what others think of me because of the things I wear or the credit cards I carry or the car I drive or other material things, I am not as evolved as I should be/want to be
  • My credit score was high enough to buy a house so it should be just fine without amassing credit card debt
  • I might be more likely to buy things I don't need on credit because I am tempted to rack up air miles or cash back, etc.  That would be a bad thing.
  • I don't have a job as of now which means I don't have a steady income.  Using a credit card would mean I am pledging future income to pay my debt and I #1 don't have a set future income, and #2 don't want to be forced to get a job to pay for debts I rack up (this is the biggest reason I live frugally and don't get myself into debt...I don't want to be forced to work a 9 yo 5 job!) 

So after much deliberation I decided against applying for any credit cards during these past few weeks when I would technically have the main qualification to get one, namely a job and an income.  It really does make more sense, to me at least, to follow what Dave Ramsey says and carry debit cards with the Visa/Mastercard logo on it them which are backed by actual cash that I have in the bank but can be used just like a credit card.  End of debate.


  1. Yay, I'm glad you decided not to do it. We have 3 that we want to get rid of when we do some refinancing and after that we will follow your example. CASH only!!
    Love reading your blog from Australia.

    1. Thanks for the support! I dont feel so bad about not getting a card now :)

  2. I have one card I use and another thats in the safe deposit box for emergency(the wifey keeps the other in her purse) But for the most part I live without the credit cards. While they are ok to have they can set you back if you don't use them wisely. I think you have the cons out weighing the pros so stick with what works for you. Thanks all that matters in the end.

    1. Exactly. The comments I made work for me while for other people, they may not be tempted to spend with a card or they may have a steady income, etc. I guess each person needs to decide on financial issues based on their own particular circumstances.