Yes, you read that title correctly. I think that Credit Cards are great. I will list the awesome qualities of Credit Cards here:
They facilitate the rapid exchange of money for goods and services.
They are extremely portable and durable.
They make buying and selling, even among peoples of different nations and states, easy and simple.
They are secure.
They have fraud protection, built in.
They come in an array of colors and brands. Gold, Silver, Platinum, Green.
They are easy to use because of their amazing magnetic swipe.
They allow for a reliable, reproducible history of transactions to be printed, copied, and shared.
They come with different rates, different rewards, and different denominations, for different peoples, corporations, and businesses.
In short, the credit card is the single greatest financial invention of the last 100 years.
Oh yeah…
Credit cards just happen to be destroying the financial foundations of hundreds and thousands of people throughout the world. Because they are so “great”, they are also so very, very dangerous. While talking about debt and debt reduction, I meet countless people who are suffering, financially and emotionally from the burden of their credit card debt. They need to be free.
Now, I know that some who read this are kicking and flailing about, screaming, “Not me! I am responsible when I use my credit card. I know what I am doing. Only irresponsible people get into too much credit card debt.” For one second, just pause, and think about what I am about to type. Just give me ONE minute of your time…That’s it. If you disagree with what I am about to type, that’s cool, but give it one minute to sink in. Ready? Here goes:
Have you driven by a bank lately? A physical, brick on brick bank? How big was it? Where was is located? Was it well lit? Did it have ample parking? Was it in a good neighborhood? Was there another branch of that same bank in the same state? The same town? The same block? Now, how do you think that bank could afford to be so big, beautiful, and well-lit? I’ll tell you how. That bank knows how to make MONEY. And do you know how they make money? Fees and interest. They make money by charging fees and collecting interest from home loans, car loans, personal loans and credit card loans. Now, MULTIPLY, by thousands and thousands, the amount of money that is exchanged at your local branch, and you will only then begin understand the millions and millions and millions of dollars that flow through the hands of the major credit card companies. Bottom Line: Credit card companies make money, hand over fist, on BOTH ends of each transaction, and, when you pay interest, in the middle of the transaction. Credit card companies employ smart, intelligent people, who are all focused on MAKING MONEY!!! And, they know what they are doing. Imagine that you are great at solving cross-word puzzles, and you are enter into competition with a single opponent, who is equally as competent as you are. Now, if given the same exact puzzle, the match-up would be fair, right? However, what if, instead of facing ONE opponent, you had to face the combined intelligence of ONE HUNDRED opponents. 1 vs. 100. Not fair, right? You would cry, “FOUL!”. But, you still think that you, alone, can outwit the combined financial intelligence and business acumen of the largest financial companies in the world. Not a chance. As long as you chose to use their services, to use their cards, and to use their “benefits”, you are subject to their whims. These are not benevolent, altruistic organizations. These are for-profit, financially savvy, end-results-oriented mega corporations. The list that I gave at the beginning of this post should not serve as a reason TO have a credit card. It should serve as a warning for why you should NOT have a credit card. Why?
They are TOO simple to get. They are TOO easy to use. They are TOO convenient. They are TOO great!
Making a financial decision should take some thought, some preparation, and even a little effort. That’s why I encourage the use of budgets, envelopes, and cash. NOT because these things are “simple” or “easy”, but because they make you stop and THINK about what you are doing with your money. Let’s use a food analogy. Which is easier? Fast food or a home-cooked meal? Which is better for you? (Please, no jokes about your wife’s/husband’s bad cooking! Dork!)
Do you see the point? Ease of use, convenience…These things can be HIGHLY over-rated. Unless you are EXTREMELY disciplined, you will order junk from the fast food restaurant. The same is true with credit card use. Unless you have displayed an amazing amount of restraint and personal discipline when it comes to personal finance issues, you should refrain from using credit cards. It is precisely because they are so “great” that they are so dangerous. I want you to be FREE, not beholden to some corporate giant. Get out of debt, stay out of debt, save your money, invest wisely, give to others, enjoy your life. LIVE!