An Unusual Day In The Life Of A Part Time Blogger
Well let me start by saying, WOW!!! Today was an extraordinary day for me. Two weeks ago I was contacted through my website by Jim Kavanagh, a writer for CNN.com. When I woke up this morning I had no idea what I was in for. Kavanagh wrote a terrific story called, Walking Away From Credit Cards, which highlighted the fact that some people have chosen to say NO to credit cards.
I was quoted as saying, “Credit card debt is our biggest hindrance in being able to take care of our families and set ourselves up for prosperity.” He continued the quote, “If your paycheck is going toward paying all these credit card companies off, you can’t get very far.” Now if you are a reader of this Web site then this is nothing new coming from me. The biggest argument you will see is by those claiming that they receive all these rewards which translate into free money. Free money? Really?
The Argument Dismantled
Do people really buy into this? Okay, that was a stupid question but it just seems as though people are willing to overlook a few things, all in the name of a free hat or a $200 cash back incentive. Let me point out the obviously, NOT so obvious here. Credit card companies are not stupid! They have figured out how to sucker you into using their product for many years now by marketing to you with no mercy. Let’s face it, they are great at making money!
When they are looking to promote their next big idea that will ensure that YOU are sucked right in, they are not worried about the puny amounts of chump change that you have “tricked them out of!!” They are more focused on the fact that you are more likely to spend 12%-18% more, in order to receive those “rewards”. This is because when you spend on plastic, you are more likely to spend more because the transaction does not register as pain, like cash would. You may as well say you are working for the credit card companies because to them, you are nothing more than an advertising expense. You are there best promoters! These companies do not spend millions of dollars on advertising, simply to give you FREE STUFF! You are kidding yourself!
I would be willing to bet that you spend AT LEAST $200 or more in order to receive that “wonderful” return on investment. Consider this! If you were to stop using credit cards, isn’t it logical to conclude that it is possible to get a bigger return by investing the extra money that you weren’t spending because of the lost incentive to buy more? To me it’s like listening to the people that waste their hard earned money on the lottery defend their habit by saying, “I won $200 a month ago?” As if that was worth it or something! HOW MUCH DID YOU SPEND TO GET THAT $200? Don’t be fooled!
Debt Free Suggestion
I contend that it is better to avoid the risk all together. So many people fail to weigh the risk involved. Even if you pay off your card every month, LIFE can still happen to you. When it does, your discipline will quickly turn on you once desperation and survival kick in. Avoid the risk and decide for yourself that having credit cards just isn’t worth it. Contrary to what so many people believe, you can have a life without using a credit card. Cut up those cards and experience what it feels like to not have a master looking over your shoulder, just waiting for you to slip up. It has happened to many and it can happen to you! I can tell you that my life has been so much more relaxed since swearing off the credit cards! No chains for me please, I’ll use CASH!
Wanna talk about it? Leave your thoughtful response below…
TO MY READERS NEW AND OLD
I have received an overwhelming amount of emails from this article! I want to let everyone know to keep their questions and comments coming. I will get to your specific question and may even do so with a blog entry on the subject. Please do not feel ignored if it takes a week or so to get to yours. Anyone that knows me can tell you I am more than up for the challenge! Welcome to Enemy of Debt, and thank you for stopping by to make my day for the entire month! I love my readers!!
To prove how much I love my readers I am going to have a giveaway to celebrate you! I will post a blog on Monday with details. I can tell you now though that I will be giving away TWO XL Dave Ramsey “Owe Nothing To Anyone” T-shirts!! What better way to celebrate such a good day, than by giving something away?
I would say that you’re about 99% right when it comes to credit card usage and the general public. Credit Cards for the most part suck the life out of people.
I do, however, must admit that I’m a HUGE fan of using them on a daily basis. Not so much for all that money/miles back (although it certainly helps!) but more for budgeting in general and simplicity.
I find that using my card helps me stay on track and keeps everything organized nicely. It’s definitely not for everyone (or most people for that matter) BUT if you can pay it off 100% of the time and you have all your stuff in order, it *can* be used for good.
I’ll leave it at that before i help spark another debate over here 😉 All in all, I’d say your comments are right on the money.
Budgets are Sexy´s last blog post..Net Worth: April – Up $7 Gs and Happy as a Clam.
Jay, how’s it going bro? Thanks for coming over and leaving your two cents. I was wondering if you could elaborate on how you use them when budgeting? When you say simplicity are you referring to convenience? My next question would be, if there are debit cards that carry the same protection as a credit card if they have the visa logo on them, wouldn’t it be safer to use a debit card? There are some that earn interest, as small as it may be, as well as offer rewards.
I am glad that you do not carry a balance, but if that is true your debit card would offer you the same benefits, only there would be no annual fees. Dude, you have plenty of savings and are making some GREAT financial decisions so your risk isn’t the same as someone without a plan. You’re rocking it man!!
I read that article and that’s how I found your site. I have to say some of your arguments are a little extreme for me personally, but I like your concepts; you present very good, sound advice. I also really like your budget tool – I’ve been looking like something for that for a long time. I especially like you broke the payment section down into weeks of the month. The only improvement I would like to see is, to have the data carry though the tabs. But again, I think its very good (especially for free ;). I plan to use it to re-work my own budging system. Thanks again to you and to CNN for showing me this website.
Oh yeah, I def. wouldn’t recommend using the c/c for most people – only if you can stay on top and use it to your advantage!
I allot a budget to the card (in my case, about $630 per month) and then do my best to stick to it. Debit cards may be safer (i’m not entirely sure) but I use USAA for everything possible and so far so good. I used to be a HUGE fan of debits, but my cash flow in tends to get a little random these days, so having those weeks to float cash is key. Plus, I keep a minimal amt. in checking until the time comes to pay this stuff off, so having debits go through every other day when I buy stuff drives me crazy now.
I love the “one statement for all expenses” every month so I can quickly & easily track how I’m doing (did i hit $630 or less, or did I go over?). I can probably go on and on about my love for credit cards, but this is already turning into a novel. haha…
All in all, it’s def. wiser for the average joe to stick with debit cards.
J. Money´s last blog post..Paying extra towards your loans now, goes a long way later!
We use our credit card for most daily expenses. We don’t use the credit card as a crutch to buy things we normally wouldn’t buy, and we pay off the card in full every month. If we’re going to buy diapers, wipes, groceries, gas, etc why not earn cash rewards on the purchases?
While the amount we spend each month is a decent chunk of change, we can easily pay off the balance without any pain.
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I agree that your way can be done, I just question the point. If debit cards offer the same rewards as some credit cards offer, then why take the risk? If you go about your daily routine and buy on credit thinking that you will pay it off at the end of the month, BUT something happens and you are unable to, then you are stuck with that unintended debt to deal with. My argument is that you can do the very same thing with a debit card without the risk. Who really cares about the supposed rewards you receive when you are still statistically likely to spend more because of that incentive? An alternative solution without having to use credit cards, would be to open up a checking account that offers a rewards debit card, place the amount of money you would spend on a credit card monthly into that account and simply use it instead. No risk is taken at all.
I certainly understand the convenience that credit cards provide I just wonder what that convenience is costing you if you look at the details more closely? There seem to be a lot of people claiming to not carry a balance from month to month when statistics show that this is not the case with MOST Americans.
Please don’t misunderstand this statement, I am not talking about you personally because I don’t know you, but I think there are a lot of people who use that argument to justify their use of credit cards when really it doesn’t apply to their situation. I am just saying that there must be a lot of people who are not as truthful about the fact that they do not carry a balance. I only say this because of the overwhelming emails I got from people claiming that they do not carry a balance in response to the cnn.com article and my opinion on credit cards.
I am glad you do not struggle with the monthly balance, but have you considered any alternatives that would give you some of the same conveniences and benefits?