Lies We Tell Ourselves So We Can Keep Our Credit Cards


Image courtesy of Stuart Miles /

People love their credit cards. Why? They aren’t valuable, can’t be traded or sold, and cost people money and often their freedom. I’ve been separated from my credit cards for over seven years and can tell you that I don’t miss them a bit. Now that I’m coaching people through their debt problems I get to hear all the same lies I used to say that justified my reason for keeping the plastic crutches.

Do you feel a shiver in your spine when you hear these lies people say so they can keep their credit cards?

“I only use my card for things I’m already going to buy anyway.”

I am going to quote something you’ve already heard but don’t think applies to you: People who spend with plastic spend more money – some studies say 12 – 18% more. To add more insult to injury, a study from two MIT professors showed people with credit cards were willing to pay twice as much for Celtics tickets as a group with cash.

I will concede that there are people who really do spend the exact same amount on credit as they would with cash. But I ask you, why deal with a middleman in Massachusetts when they are the perfect person to manage a debit card at home?

Tell the truth, we have all overspent when using plastic. Go to cash because OPM will never feel as powerful as the money in your investment accounts.

“I only use this card for the points.”

While there is a slight benefit to this excuse, it is not a good reason to keep using credit cards. People really do believe they are getting ahead financially when they get cash back from Discover Card. What they don’t realize is they have been paying 2-3% more for all the items they have bought, everywhere.

The average credit card swipe fee is between 1.93% for gasoline and 3.03% for restaurants. Merchants aren’t just going to sit idly by and soak up the expense, they are going to raise the price of their stuff or shrink the size of the product so they can hit their profit margins. This isn’t dishonest or shifty; it’s what keeps their doors open and the new products rolling out.

Unfortunately this affects everybody, even cash buyers since most retailers don’t offer cash discounts. Using credit cards are costing you and your neighbor money, no matter what your cash-back offer is.

“My credit card interest rate is blah blah blah.”

The moment somebody tells you about their great low interest rate you can bet they are in debt. Why? Because people who pay their credit cards off every month don’t get charged interest. This is justification for their overspending, and it is hazardous to their wealth.

Don’t feel sorry for them – help them out. Tell them that debit cards have even lower interest rates, zero percent, and are accepted in more places than American Express.

“Debit cards aren’t safe, but my credit cards are.”

Why are the only technological advancements shared publicly about Google updates and the newest iPhone features? You can’t tell me that fraud protection hasn’t improved and the same tools for credit transactions don’t apply to debit. I think those issues were solved back during the Y2K upgrades.

Debit cards have the exact same Zero Liability Protection as credit cards, Visa says so on their website.

Don’t believe it’s true? My wife and I both had our personal debit cards and my small business debit card compromised within a 15-month period. In each situation the banks contacted us within hours of the fraudulent activity and reversed the charges. However, a relative had her credit card compromised. The company told her to contact the business where the charges originated and fight with them. That’s stupid!


Our banks wanted to keep our business; her credit card company didn’t give a squat about her. Who’s safer now Citi?

“My credit score will suffer if I go to all cash.”

Nobody is telling you to damage your credit score. Guess what? Cutting up your credit cards and closing the accounts will not cause you to have a bad credit score. Those who preach using debt as a tool and that you need to “build your credit score” are sending the exact same message as I am in regards to behaviors that will cause you to have a good score: Pay your bills and debts on time. That’s it. You will have a good credit score if you simply do those two things – regardless of the number of credit cards you have!

I would submit to you that the credit scoring system, headed by Fair Isaacs Corporation, is a one-sided measurement of debt. Don’t believe me? Take a look at your credit reports and see if there is anything missing. Look closer. Did you notice your rent, cell phone bills, and the money you send to Comcast every month aren’t on there? They aren’t listed because they are not debts. How can a system that is supposed to prove you are credit worthy not include some of the most common monthly bills? Fair Isaac isn’t really fair, are they?

The result is a student that paid his way through college and received his car as a graduation gift is now being told he’s not credit worthy. It’s a good thing there is a company out there called eCredable that can prove our credit worthiness and has the law to back them up. For more read the Equal Credit Opportunity Act Regulation B.

I’m not asking you to go to all cash. What I am saying is we have to stop lying to ourselves that credit cards are good for our finances. Support your local bank by using their debit card and keep swipe fees away from the big banks. Your small business owner will thank you and your community will be stronger because of it.

What are some of the excuses you hear your friends say that make them keep their credit cards?

About Steve Stewart

25 Responses to “Lies We Tell Ourselves So We Can Keep Our Credit Cards”

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  1. I one I have heard from some friends that makes me laugh is “My monthly credit card statement helps me keeps track of how I’m spending my money” Isn’t that called a budget?

    • Ha! That’s funny!

      Following that form of logic is kinda like saying “My credit card lets me look through the back car window instead of the windshield”. By then it is too late

  2. I made $700 in CC rewards last year with Citi. Yes, they can be bad but as long as you have some discipline you should be ok. Also with all the hacker incidents like Target last month, I much rather use my credit card (not my money) than my debit card which hits my bank account.


    • Oh no, they got to you too. This may sound rude, please don’t take it that way: You’ve been sold on the credit card industry’s sales pitch.

      You can’t “make money” with a credit card, you’re simply rebated on a portion of what you spent. Had you really made the money they would be required to issue a 1099 (CitiBank actually tried to do this with a rewards program they offered in 2011 but was shot down, thank goodness).

      Everyone touts their credit card’s rewards program but nobody talks about the underlying problem: Somebody has to pay for the points/rewards/cash back, and it usually ends up being the consumer through inflated prices. We all lose.

      • JMK says:

        Until retailers start charging extra to pay with a credit card as they do in most parts of Europe, there isn’t an disincentive in North America to use the card and collect the rewards. Yes I realize they are building in the cost of the cards, but unless I’m going to get a discount for paying cash/debit or they charge me more for using the card, then I’ll happily carry on using the card (and spending no more than what’s scheduled in our spending plan, and less if I can find a sale or skip a planned purchase entirely). When vacationing in Europe I use cash in many cases to avoid paying the additional charge for credit cards, whereas at home I virtually never even carry cash. I use the most logical payment method for the circumstance. BTW – the four of us go to Europe every year on flights paid for with CC points…

        We once had our cc compromised but because I monitor the charges online on a daily basis (to align our spending plan with what’s been processed), I caught it immediately and they reversed them out without an issue and provided us with new card numbers. By being prompt I probably saved them a ton in charges they would have had to absorb. If it had been my debit card that was impacted, automatic payments and transfers could have been impacted by the unexpectedly missing money. It’s true that the bank will cover charges to a compromised debit card and straighten it all out, but in the meantime if I’m somewhere in Europe on vacation and hoping to pull cash from an ATM I won’t really be in a position to deal with the problems going on in my bank account back home.

        I think the absolutely valid question you’re really trying to make people ask themselves is “can you restrain yourself and spend precisely the same regardless of the method used to transfer the funds from you to the merchant/service provider”? And do you swear you’ll never charge anything for which you don’t have the cash sitting in your bank account right now? If not, then credit cards are probably not for you. Credit card companies hope they’ll be misused to wrack up debt – otherwise they wouldn’t make any profit on interest and would have no reason to be in business. Sadley, as long as there are plenty of people misusing credit, it is a great opportunity for the uber-responsible folks to benefit. Once everyone takes your advice and gets their financial house in order credit cards may become extinct.

        • Wouldn’t that be crazy if everyone did start paying for things differently because of their choice of plastic? That would bring an entirely new aspect of personal responsibility to the table.

          Individuals would start using cash in droves, saving merchants thousands of dollars in swipe fees. More and more people would instantly become better shoppers because they would be paying attention to what they were doing rather than blindly swiping their plastic saying “I’ll deal with this later”. All because they didn’t want to pay a $.25 or $.50 additional fee for using credit.

          That would be awesome.

      • Wouldn’t that be crazy if everyone did start charging differently because of their choice of plastic? That would bring an entirely new aspect of personal responsibility to the table.

        Individuals would start using cash in droves, saving merchants thousands of dollars in swipe fees. More and more people would instantly become better shoppers because they would be paying attention to what they were doing rather than blindly swiping their plastic saying “I’ll deal with this later”. All because they didn’t want to pay a $.25 or $.50 additional fee for using credit.

        That would be awesome.

  3. Here’s my excuse, and I promise it’s not a lie: I live in Canada, and it is not possible to make certain online purchases with a Visa debit card yet. I hope and believe that the Visa debit card will become as common here in Canada as it is in the U.S. I really want to cut my credit card, and I actually plan to do so within a few months. I just don’t feel completely confident about it because of the gaps in Visa debit card use.

    • Prudence, I don’t understand how an online shopping cart knows the difference between a credit card or a debit card. Are you trying to use your card online with your PIN number, because I would never suggest you do that.

      I just use my debit card like a credit card for everything online (and PayPal when possible), I just don’t incur the debt – even if it would only be for 30 days until the statement were to come in.

      • In order to answer your questions, I phoned CIBC (a Canadian Bank that issues Visa Debit cards: 1-800-465-2422) and said, “There seem to be online businesses in Canada that don’t accept Visa Debit.” The representative confirmed that fact. She said that a growing number of online businesses in Canada are accepting Visa Debit, but that there are still many that don’t. Like you, I don’t know how an online shopping cart knows the difference between a credit card and a debit card – especially since both can have the name “Visa” on them. But in Canada, our online shopping carts very often reject Visa debit. It makes it that much more challenging to cut our credit cards, but as I said, I still plan to do it.

  4. Kathy says:

    Credit card or cash has never made a difference to us. Probably because I am so anal (my husband’s word, I prefer “attentive”) to what we charge/spend. Like JMK, I check daily the ONE CC we use, much to my husband’s unhappiness because he now can’t try to slip something in. It is automatically paid in full out of an account funded monthly by the amount allocated in the budget for the charges. Once a week I pay the card for anything out of the ordinary put on the card the previous week (car maintenance or medicine, for example). Those extra charges are out of a different account where the money is funded specifically for that purpose. The points are used for a big-ticket, splurge item we wouldn’t normally get. Frankly, if using cash would give me a discount each time, I would certainly go that route. And put aside the amount saved, using that cash for the splurge….and again getting the discount on it. A long time ago I included the only way for us to truly control our finances was to look at it as a game. Discount for cash would certainly up the ante for me!

  5. I only use credit and neither one of us ever have any cash. We’re definitely one of the exceptions you talk about. We pay everything on credit- groceries ($500 per month), gas and miscellaneous ($200 per months), our electric bill ($100-$200 per month), health insurance ($395 per month), etc. and get huge rewards for doing so. We are leaving for Jamaica tomorrow and I paid for our flights with Chase Ultimate Rewards points and all but $500 of our all-inclusive hotel with our Barclay Arrival Card points. I am currently planning a trip to London/Paris for this fall that will only cost us a total of $198 for our flights and hotel stays for a week. We travel anyways so credit card rewards/points/miles help us stretch our travel budget much farther than it would regularly go. Everyone complains that “someone” is paying for those rewards, either through interest or through inflated prices, but us refusing to participate won’t change that fact. I haven’t paid interest on anything for 4-5 years!

    • Have fun in Jamaica.

    • Kathy says:

      Darn! I never thought of paying health insurance premiums via credit card. Up until this year we were using my retiree medical benefits, and the after-tax premiums I just had deducted from my monthly check and paid that way. Now I see the benefit if I had put those premiums on my credit card. Live and learn. Good suggestion.

      • Anthem currently lets me put them on there, Kathy. They won’t let me do it via the web, but they will do it over the phone and they don’t charge any type of convenience fee. I think they’re just glad to get their money. Same thing with our utility bills at our new house, which is good during winter months like this when our electric bill is so high! =/ Might as well earn some points/miles for that.

        • JMK says:

          The only things I don’t run through the card are the mortgage, property taxes and electricity. Initially the electricity provider wouldn’t accept credit cards, but now they do with a ginormous service fee to do it, so it’s still not worth it. I have literally everything else auto charging to the card (insurance, internet, cell, house alarm monitoring, etc). No bill is ever paid late because they get their money automatically, even when I’m on vacation. And best of all I have only the one bill to pay and match everything up against my spreadsheet of what was expected.

          If there was an error in the bill I’d rather have them send a reversal to my credit card than have pulled too much from my bank account (don’t understand allowing any merchant to pull monthly bills directly from your account, mistakes happen). I normally pay off the credit card weekly, but if there was an error I can hold off paying that one for a few weeks until the credit arrives and no harm done.

          Sorry Steve, we seem to have completely derailed the point you were trying to make. Perhaps the folks you are really targetting are reading but aren’t the ones posting responses. For those of us who monitor and track the minute details on spreadsheets, never pay interest and reap the benefits of using a card, you’ll have a really tough sell.

          • Here’s another consideration – along the lines of social conscience: We all know that “someone” pays for the points and other rewards offered by credit card companies. A big profit center for cc companies lies in the chronic debt of all those who pay interest ad infinitum. In general, higher income people pay off their credit cards 100% every month. The bulk of interest payers are lower income people. So the wealthier get to benefit from the debt of the less wealthy. That doesn’t sit well with me, and although we do pay off our credit cards 100% every month, I plan to cut mine.

  6. I’m admittedly a credit card junkie. I’ve never had to pay a late fee or interest because I pay off the full balance every two weeks or so. The only time I won’t use the card is when there’s an incentive to use cash (like a lower price). I also enjoy having a paper trail of my spending to hold me accountable.

  7. We just have one capital one card that gets you double the miles, minimum.

    We only use it when we know we’re going to buy an appliance or any other purchase we were going to make anyway that is above our $250 threshold. Then, what I usually do is whip out my iPhone and pay the credit card bill in full.

  8. Love this post. That’s all I can say. Actually I can also say it’s so true, I’ve said all those things and I’ve definitely been there, done that. Absolutely love this – made me smile and cry at the same time when I look back at how awful my money life used to be 🙂

    • Thanks Tahnya. Your comment is a beacon in the storm of comments of credit-card toutin’ EOD fans.

      It sounds like you had a real tough time with money in the past. How’s your money now? (It looks like you’re doing pretty good)

  9. Dianne says:

    Steve, I agree with you completely, except for one thing. For the past 3years, I’ve thrown every spare dime towards my credit card debt, only buying my needs and no wants. I had a $1,000 emergency fund set up, and paid cash for everything. I was on my way to being debt free by the summer of this year, and then I had massive plumbing problems that cost $9,000. I was able to use the checks the cc company mailed to me at zero interest for 18 months, so I’ve lost two years of hard work. Even if it is zero interest, it is still debt. What I’m saying is, $1,000 in emergency fund is not enough. Now, I take what I used to pay on my card, and take half of that to put in my emergency fund. It will take longer to pay off my debt, but if an emergency comes, I will have the resources and not have to charge it.

    • Dianne, I’m sorry to hear about your emergency. That must have been some plumbing problem! I hope you get to pay it off quickly and get ahead so you will never have to rely on credit again!

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