Just read an article on how credit cards aren’t always bad. Although I believe there are plenty of problems with credit cards the article makes a good point.
Almost all the financial advice out there is geared to those have trouble
handling their finances.
How often have you read: “a 401(k) is good because it lets your employee take out the money for the 401(k) before you can get your hands on it”? Somehow this is good because you don’t have the discipline to do so.
How often do you read: “Use cash instead of credit so you won’t spend too much”? Yet another mind trick for those that can’t control spending when it is done with plastic.
Yet, there is this entire segment of the population that is responsible, that does have the discipline to pay themselves first without locking up their money in 401(k) for the next 20 years and that does have the discipline and means to pay off their credit cards at the end of the month.
For these people it is perfectly fine to use credit cards. For them credit cards are not only convenient; they are also a great tool in tracking their expenses. Credit cards leave no stone unturned when it comes to tracking your expenses, which in turn can be really handy creating comprehensive budgets. I personally use quicken which automatically downloads every credit card transaction I make. That in turn allows me to accurately categorize all my expenses making is useful data for any budget.
Then there are some of the perks that come with credit cards. Later this year I get to take a trip to Europe with one ticket fully paid for by miles. That is a $1,800 value (that’s how much I’m paying for the companion tickets).
I’ve stayed many of night for free at Hiltons, Holiday Inns and Marriotts all compliments of my credit card points.
Speaking of flying to Europe, those cards of mine work over there as well as they do over here. Pretty handy. Oh, and my rental car should be covered by the insurance benefits that come with the credit card that is paying for it.
Yes it is true, for many a credit cards can only spiral them deeper into financial mayhem than they already are. The many doesn’t represent us all. For some of us credit cards can be very useful.
The only reason I would like to see less use of credit cards is because the technology it antiquated and too vulnerable to hacking. Payment systems like Apple Pay (or whatever alternatives may come around) should be much better in protecting our transactions and information that goes along with those.
Until the day that those new less vulnerable payment options become available (probably by the same providers that handle our credit today) I am happy to swipe that card a few more times.
Good luck reaching your financial goals.
