Credit Cards - Should You Have OneI thought that I'd better give you my thoughts on credit cards since this is a website about the scourge of debt. Are they just evil plastic or can they be used responsibly? Opinions vary widely on the usefulness of credit cards and how much they are responsible for the large debts that we live under. The problem that I have with this is that I believe that it is each of us that are responsible for our actions. Regardless of how great the advertisements and commercials are we need to be responsible with the income that we receive. That being said, I do believe there are people that should not have one. If you have any debt on a credit card that cannot be paid off at the end of the month then you must get rid of your credit cards. They will eat you alive if you carry a balance on them. Our purpose is to get out of debt, and credit card purchases that you do not have the money to back up will derail this plan. There are no excuses. When you successfully pull yourself out of debt you may want to get a credit card for larger purchases, give it a try. The first time you make a purchase with it that you do not have the money to pay the bill, cut it up and cancel it. Do not play with that snake. You have to be disciplined and if you are not, you should not have a one. I do use a credit card on occasion myself. I only use it if I have the money to pay the purchase off as soon as the bill arrives. A credit card comes in handy for internet or catalog purchases as well as large purchases, when I would rather not carry a large sum of money. A debit card is another option. The debit card is tied to your bank account and a purchase cannot be made if the money is not there to make it. These work well for many people. You can't go into debt with a debit card. The only drawback to the debit card that I can see is that if someone steals the card or your number then the money will be taken from your account. You will not be responsible for it, but your fight will be to get money put back into your account. On the other hand, with a credit card, you will get a bill for the thief's expenses but you will not have money taken from your bank account. You have to convince them that you did not make the purchase. For those that cannot handle a credit card without ending up carrying a balance the debit card is the way to go. One other caution with a credit card is the points that you can accumulate. Earning points with your card is OK but make sure that you are not just buying things with the card so that you receive points. Do not let the promise of great rewards with your points cause you to spend more money. There are also some that spend more money when they use a credit card. Two things can help you to overcome this. The first is to only use it for large purchases and sparingly. If the large purchases become too easy, and again you do not have the cash to pay the bill, then you need to get rid of the card. Since you are on a good tight budget you will also notice if the card is allowing you to loosen your spending up too much. Simply try the credit card and then the cash approach for a couple of months and see which one allows you to spend more money. Of course, use the one that forces you to spend less. In most instances this will be cash, but this is not always the case. I have talked to some people that will spend cash if they have it in their pocket while they will not touch their credit card, but this is not the norm. Whatever you do, realize that credit cards can jump up and bite you real fast. To quote Elmer Fudd, "Be very, very careful".
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