American Express? Yep, You Read That Correctly
I was recently contacted by someone who wanted to know if I would be interested in getting paid to write articles geared towards helping young people become more financially responsible. I responded with interest and wanted to know more. When I found out that the new site called CURRENCY, was being developed by American Express and Federated Media, I chuckled at the irony, but the timing couldn’t have been better.
Currency Launched on Tuesday. Here are two of my published articles:
If you enjoyed them, please “Like” them on Facebook, share them on Twitter, or both. Thanks, and I appreciate your support! 😀
I like this feature: Look Into Your Financial Future
Moving on.
If American Express is making an effort to educate young people about financial responsibility, I’m excited to be a part of that. I don’t feel guilty or conflicted one bit since my views on credit cards are now less extreme and more rational than they once were. They changed long before this opportunity ever surfaced. (link below)
I did get a few emails from a few people though. Some were shocked and curious, while others were arrogant and obnoxious. For the most part I was congratulated for the opportunity, but a few seemed to be looking for that “gotcha” moment. My response to them would be that people grow and opinions change.
What hasn’t changed is this, if you have even one credit card with a balance you can’t pay RIGHT NOW, I think you need to chop that card to pieces until you can learn to spend less than you make. How’s that for a little Behavior Meets Reality—Enemy of Debt-style? 🙂
Extreme Views of Credit Cards Past
Over a year ago, my views on credit cards were rather extreme. After all, I was a product of Dave Ramsey’s Financial Peace University (FPU) where people were encouraged to cut up their credit cards in class. The very first FPU I ever lead, the class bought me a giant pair of “Dave Ramsey” scissors with Enemy of Debt inscribed on them at the final class. I love those scissors, because they remind me of INTENSITY and BETTER FINANCIAL CHOICES! They represent action!
I swore off credit cards because I needed to. My habits were out of control, as are most of the people who go through Financial Peace University. I agree with Dave under these circumstances, cut them up!
Some bloggers will even remember me getting geared up to host an idea I had, called The Great Credit Card Debate. J Money from Budgets Are Sexy and myself, were going to take different sides on the issue, and each month, two different bloggers were going to battle it out on our blogs. I was to host the “hate” credit cards side, while J Money would host the “love” credit cards side, hence the irony mentioned above.
It was supposed to happen January of 2010, but it was then that I started really thinking about how much sense it made to hate credit cards, when there were people out there that actually handled them responsibly.
I published some pretty hardcore opinions about those views,but as I grew and my financial situation became stronger, those views changed. I can admit when I’m wrong.
It took me a couple of months to realize, hating credit cards, or credit card companies, was irrational at best. It was debt that I wanted people to avoid, which was the NUMBER ONE reason I started blogging in the first place. The problem isn’t credit cards, it’s the person using those cards to acquire debt on something they CANNOT AFFORD!
What I realized is that hating credit cards for running up your debt is like hating Chic-fil-A for making you fat.
- Some people can eat their delicious chicken sandwiches and fries responsibly, and some cannot. To say NO ONE should eat at Chi-fil-A because some people cannot handle it is wrong.
- Some people can use credit cards as a personal finance tool, and some cannot. To say NO ONE should use credit cards is wrong.
I for one, used to be that guy that could not!
On May 19th 2010, I wrote Your Financial Mindset Determines Your Ability To Handle Credit Cards, which was my first official article explaining my shift in position.
Debt can be used responsibly too, doesn’t that change your opinion about debt?
Nope, not even a little bit, because using credit cards responsibly doesn’t require you to be slave to any lender—debt ALWAYS does—whether you want to admit it or not. Not owing someone money WILL ALWAYS BE BETTER than owing someone. Even people who believe in debt have to admit that.
My Official Stance on Credit Cards
I no longer feel that credit cards are evil. I admit I used to feel that way, but as I explained earlier, I realized that a credit card by itself, IS NOT DEBT! My beef is with debt, and if you use credit cards to buy things you really can’t afford, YOU ARE the problem!
If you are in debt, and looking for answers to your debt-filled problems, cutting your cards up is a great idea! You need to get control of your habits before it’s too late, and sometimes extreme circumstances call for extreme measures! If that means cutting them up to save yourself or your family, you better get to snipping!
J Money and I used to have some pretty fun discussions about this topic. Trust me, it wasn’t angry like “Liberal Vs Conservative”, it was actually productive. I would even say that our friendship developed out of a mutual respect and understanding of one another. Check out our debate in the comments section of Money Funk: 6 Financial Things I Wish I Had Known When Starting Out in Life. (Notice that even then, I was at least reasonable about accepting that some could use credit cards responsibly.)
That was an AWESOME discussion, and the best part is, I was given the opportunity to write the storyline for the Personal Finance Comics , so I chose to base it on that friendly debate. 😀
Now, all three of us are writing for American Express!
Basically, it boils down to this. If you have adequate emergency savings of at least 3 months of expenses, and have no debt to speak of, I don’t see credit cards being a problem for you. With that said, I’m assuming you will be paying off whatever you charge every single month, IN FULL—NO EXCUSES.
Take away those qualifiers and I believe you are putting yourself at risk.
Even most credit card companies warn you about the dangers of spending more than you can pay back. For example, American Express partnered with Junior Achievement to give this advice on using credit:
“Don’t spend what you can’t repay. Using a credit card is borrowing money and paying it back with interest. Because you’re not using cash from your wallet, it’s important to keep track of what you’ve charged to your credit card. It’s best to charge only what you know you can pay back each month.” (my emphasis added)
Do I Now Use Credit Cards Because of This Change in Position?
Nope, not a single one. In 2008, I Killed My Credit Cards, and I ‘m pretty sure the relationship has been damaged. 😉
Seriously though, I think they can be useful to some, but I don’t think they are necessary. We have not applied for any cards and do not see ourselves doing so in the future.
Do I think we could handle them now?
Sure. I am pretty confident that the habits and behaviors that put us $26,000 in debt (without the house), are under control. We know better now, and as hard as we worked to pay it all off, there’s not a chance in this world, we will ever return. Still, if it is not broken, don’t fix it.
This is a great explanation of your thoughts on credit cards, Brad. Although I couldn’t resist throwing in one Dave-like “American Excess” barb, I see this as an awesome opportunity to team with a killer line-up of financial writers to educate the masses. And my thoughts on credit cards are similar to you “reformed” views. 🙂
Great posts from you at Currency so far!
Haha, no worries Dustin, I do have a sense of humor. You and I have even discussed Dave\’s philosophy before and am pretty sure we came to basically the same conclusions. Thanks for the support good buddy. 😀
I love the end sentence. Nice closing.
And I love being a comic. Its totally like winning the Grammy’s for me.
That discussion between you and J$ was very engaging. Glad I wrote the topic. 😉
I support you on your adamant stance you took back then. I think you need to hate credit cards when you are getting out of debt, even though its your own behavior (and CC companies adverts) that are the issue. But when you have a weakness, it is easier to put the blame on the credit cards companies. So go for it; blame them. I do agree with your guidelines to take before using a credit card. If you can prove those points and pay back back in full each month – you are responsible.
Happy to be part of a great group of writers for Amex’s Currency – because even though they are a CC company, they are supporting it with a site written for Gen X and Y to be RESPONSIBLE with their finances. 🙂
BTW, I FB, Twittered, and Reddited you articles. Cuz they’re that good.
Thanks Money Funk! The comic thing is definitely pretty cool! I have to admit it\’s nice having my scruffy mug on a comic strip. Haha! There is another project in the works that I wrote and I can\’t wait for it to be revealed. Fred and his crew really do an amazing job don\’t they?
Yeah, for people in debt, it\’s absolutely necessary to break free from the problem, which in most cases, is rampant credit card use. I still have those scissors I mentioned in the post and I will still be cutting up cards for people who need to let go. It\’s usually traumatic for the person who makes the hard decisions but necessary for change to be permanent.
I\’m glad to be writing with all of you as well. It\’s going to be fun!
I love your honesty dude, seriously. Not many people would be cool w/ letting all this out – you inspire us!!! Also HUGE land w/ that Amex deal. Your thoughts are being noticed 😉
Dude, the opportunity is HUGE! It came out of right field, and I was glad to see so many other great bloggers, yourself included, on the team! I had to write this post because this new adventure I decided to join, will be a BIG SHOCK some of my readers, considering my credit card hating past. LOL Thanks for the support always my friend! When are you coming back to the ville for a beer? 🙂
Congrats on the new gig!!
Thanks Justin!
Hmmm, never thought about your dilemma, but now that you bring it up, I can see how it’s somewhat of an irony, and a tough pickle given your previous stance against credit cards.
That said, they pay relatively well, and the power of the mighty dollar is quite alluring. I guess you can take it as a means to an end.
Look forward to reading some of your future posts!
Cheers,
Sam
LOL It was never really a pickle but certainly ironic. I definitely wouldn\’t have taken the gig with American Express for any amount of money before my stance changed though. (really all that changed was my opinion that having a credit card was stupid for everyone.) I turn down money from advertisers all the time based on principle. Still, since my opinion did change long before this became available, the money makes it an even nicer opportunity to be a part of.
It\’s really nice to be working beside some great bloggers too. I really liked your article on giving. It was a great read!
Hey Brad! I know this post is a little old, but I’m new to the world of PF bloggers and just came across this. I’ve been reading through EoD, and a few other blogs, and this post really hit home for me.
I filed Chapter 7 back in 2009 after battling some pretty horrendous business debt from a failed business. I swore off credit cards completely because not only had I been irresponsible with them, they jacked up all my rates from around 7% to 25% BEFORE I was in any hot water, and refused to provide any leeway with me after doing so. After my bankruptcy, I swore I’d never use one again.
After living on all cash for nearly two years, I had developed much better financial habits. I am now in a position to pay off a modest house (on my single person income) within about 3 years. But I can’t do that while renting at the same time. In order to get a mortgage to move me from renting to owning, I’ve had to do some credit repair. I got a crappy card from a crappy bank and buy one tank of gas every month and pay it off. My primary FICO went from a 533 to a 656 in three months, and I haven’t paid a single red cent in interest.
It’s definitely not the card that’s the problem, it’s the user. If you’re able to earn a living by being paid by a credit card company while still providing sound financial advice, more power to you! It’s only if you start crossing the line into supporting credit card debt that I’d start to worry!
Love the blog btw. I look forward to some quality discussion with you and your readers in the future!
Won’t find me ever supporting debt of any kind Eric. No worries there. LOL My family has taken the very extreme (according to society) stance on debt and pledged to NEVER borrow another dime for the rest of our lives…EVER for any reason. 😀 I am always going to trey and suggest that others do the same, even if not to the point that we have. Really the ONLY debt I consider somewhat okay is mortgage debt and even that, to me can be avoided.. 😀
Maybe you can refer me to more information, but isn’t it important to borrow money to build credit?
It depends on if you believe that in order to have stuff you have to build credit. No one NEEDS to borrow money to build credit. If someone uses a credit card BUT pays it off every month and is on time with their rent and utilities it builds their credit. The problem people make is that they borrow money and continue to pay interest month in and month out for their entire lives in the name of building credit. Build credit for what? Buying a house? You don’t HAVE TO get a mortgage to buy a house, but if you aren’t willing to save your butt off in the beginning, then yes you have to build credit so that you can get that mortgage.
My feeling is this. All debt is risk. Why take the risk if you don’t have to. In a bad economy, a house that you own is a house payment you don’t have to worry about paying. If you owe no one, you are in a much better position. It means you can do all the things you really want to because you aren’t paying someone else your paycheck each and every pay period. If you don’t have debt and you lose your job, it means you can take a much crappier job because all you have to do is pay for utilities, food and possibly transportation.
To go into debt, for the belief that you must “build your credit” is one of the very reasons so many people are suffering right now.
Pay your bills each month and get a credit card if you want to build credit but be aware of the risk you are taking by doing so. If you can pay your bill each month then more power to you, but I refuse to borrow money to have a score I don’t need. We pay cash for everything and that includes the next house we buy. My score is non-existent because I haven’t borrowed or had a credit card since the end of 2007 and I paid off every debt in my name in 2008. Three years later they have nothing to formulate a score from.
I have the options to do so much more, like be a stay at home dad and freelance write when I want to. Debt changes all that. Debt is seriously slavery because you spend your entire life paying someone else and making them rich instead of yourself. The credit score game gets more people in debt than anything else.
Sorry about the long reply. I could of just said you do not need to borrow money to build your credit score. 😀
credit + debt = bondage
no debt = wealth + freedom
Thanks for your quick reply. I think I understand what you mean. I guess the problem is that it’s easy to get too comfortable spending on credit that we can get in over our heads. Paying what I spend off every month is a great idea. I’ll try that.
No problem Amber! 😀
Good luck!
So, how do we get started writing for American Express?
I was contacted (by a well-known blogger) about writing for a site designed to help young people make better financial decisions. I was able to accept the writing gig because we didn’t have to write about credit cards otherwise they might not have liked me very much. 🙂
It wasn’t a permanent writing job just something to help launch. It paid well and I was pleased about the information on the site.