Credit cards are the devil. When I look at the amount of debt this country has from credit cards with just as much justification for using them; it makes me wonder why so many people keep doing the same thing and expecting different results.
One thing that I’ve noticed is that creative types are especially vulnerable. Maybe it’s because we tend to be procrastinators or have eyes bigger than our stomachs. Maybe it’s because creative jobs tend not to pay as well. Maybe it’s because we often make decisions based on emotions instead of logic. Maybe it’s because many of us don’t like to think about money.
Most of all, I think it’s because we are too smart for our own good. Creative people have amazing vision. We come up with elaborate financial plans for ourselves and our families that often surpass our ability to execute them.
I hear extremely intelligent people using these excuses for having credit cards all the time. They think they can outsmart credit card companies who have built a multi-billion dollar industry on people just like them. When you feel yourself getting too smart for your own good when it comes to credit cards, here are some rebuttals to help cool you down.
1. I Need it in Case of an Emergency
This is the number one excuse for owning a credit card. People like the security of a safety blanket. The problem is that emergencies are a fact of life. Statistically, over the course of a few years, it is almost guaranteed that you will have to shell out several thousands of dollars in unexpected car repairs, medical bills, travel expenses, or an infinite number of other Murphy’s Law type expenses.
If you were really looking out for yourself in case of an emergency, you would be building an emergency fund. If you think that a credit card helps you feel secure, try a few thousand dollars in the bank. Operating with an emergency fund of at least a thousand dollars eliminates the need for a credit card.
Set up an automatic transfer of whatever you can afford to a savings account. You won’t miss it, and after several months you will start to build a real safety blanket. Just make sure that you never touch it except for emergencies! If you use your savings account for purchases, open a money market account to hold the sacred funds.
2. I Need it to Build Credit.
This is the one that got me. When I turned eighteen and left the house for college, I thought I was becoming an adult by getting a credit card. Unfortunately, at that age I had no idea what I was doing and ended up with over $20,000 in high interest debt.
If you are absolutely convinced that you need to build credit, take out a small loan from your local bank for a couple thousand dollars. Put the money in a savings account that you will never touch and set up automatic transfers back to the bank to pay it off over the duration of the loan.
3. I Need it for Airline Miles
Do you think that credit card companies would be giving out miles if they didn’t get their money back in some way? Some people think that they can faithfully make all of their purchases on their credit cards each month and pay off the balances before the interest kicks in. Let me tell you: there are very few people on this planet with that kind of discipline and I guarantee you that they are not creative types.
This is what I mean by being too smart for your own good. It sounds like a perfectly logical and even profitable plan, but thinking and doing are two different things. I have learned as I have grown older that even if I feel capable of doing something that requires discipline, it is best to err on the side of caution. This is especially true if the rewards are not very big. Why put yourself in constant temptation for a few crummy airline miles?
4. They Give me Cash Back
The credit card companies have us all thinking backwards. Somewhere along the line, they convinced us that we can actually make money by spending it. So let me get this straight, you want me to run up my card by several thousand dollars, pay you hundreds in interest, and in return you’ll give me twenty dollars back?
Oh, wait… you’re that one guy out of a million who has the discipline to pay off his card each month. You like to constantly monitor yourself, making sure you have enough to cover your bill at the end of the month so that you can make a measly ten bucks extra a month? Ten bucks, or even a hundred, is not worth my time and stress.
5. I Have the new Spend to Save Card
Just when I thought that the biggest switch-a-roo in history couldn’t be topped, the credit card companies convinced us that spending money could actually help us save. I don’t even know what to say about this. I’m speechless.
No, wait. I can’t let this one go. You actually think that the way to save money is to spend it? Try not spending it.
6. I Feel Powerful Using my Platinum Card
I sure felt great when they sent me my first platinum card. It was like I had been let into an elite group. It was fun to pull out at restaurants and flash around the table.
Now, when I see people flashing platinum at me, I can see right though it. Cash is what impresses me. Pull out a couple of hundos and slap ‘em on top of the check and you’ve got my attention.
7. Mine Has a Cool Picture On It
Do you find yourself getting cards with a logo from your alma mater? Do you think that going into debt will somehow make you a more loyal alumni member?
Once again, the card companies are playing off of our emotions to put us into a position to go into debt. Resist the temptation to get a card just because it is cool. Put some green presidents in your pocket like Franklin, Lincoln, Jackson, and Grant. Now those guys are cool.
8. I Don’t Make Enough Money to Pay For Stuff
If you are relying on your credit cards to live on, we have a serious problem. If this is the case, you need to do two things immediately:
1) Drop all but the most essential expenses. Sell your car, move to a smaller apartment, get rid of all of your gadgets.
2) Make some more money. Pick up overtime, get a part time job, or start selling stuff.
9. I Need More Toys/Gadgets/Stuff
We are so focused on possessions in today’s culture that we tend to think we need certain things to be respected by others. If you are falling to the pressure of keeping up with the Jones’, it might be time to take a look at where you are getting your self worth. If it is from your possessions and position in society, it is time to re-calibrate it to within yourself. You don’t need anything or anyone to tell you what you are worth.
10. I Got a 0% Introductory Rate
Sucker… Just because the interest rate is zero, doesn’t mean that you don’t owe them the money. It’s still debt.
I hope this has been enough to talk a few of you down from the ledge of the credit card skyscraper. If you are still convinced that you need one, well, maybe there’s nothing that will convince you of otherwise.
When I quit using credit cards, it wasn’t because I was making more money. In fact, I was making less. I just made do and found that I really didn’t miss them anyway.