Credit cards have become a society norm in this generation. Not only are they used for convenience purpose, the heaps of benefits, rebates and cashbacks have made carry them only sensible.
On the other hand, financial guru Dave Ramsey’s outright rejection of using them due to fear of misuse and financial collapse makes people question whether we should or should not carry them.
My point of view is that if I am buying a $3,000 thing, for example a diamond ring, or a laptop, and my credit card gives me a 3% cashback, which is $90. It is hard to say “No” to $90. What if I am spending $10,000 or what if the cashback is 5% instead of 3%? Isn’t it make more sense to utilise the credit card?
However, I know the suffering of the consequences of not being able to pay our credit card bills. The debt snowballs and turn into an avalanche in a blink of an eye.
So, should I or should I not carry a credit card?
I have devised a solution to this question. Yes, you can carry credit cards if you can follow ALL the following 4 commandments:
1. Pay back your usage on the same day
This will not allow you to forget about your purchases and forgot to pay your bills.
2. Pay only what you can afford
Do i need to say more?
3. Keep track of what you spend with your credit card on a separate spreadsheet
This will ensure that you are aware of what you have paid and not. Sometimes, the charges do not reflect immediately or the next day. This will address the problem of forgetting about your charges.
4. Have a bi-weekly “Check Your Credit Cards Day”
Do a run through on all your credit cards. Bi-weekly so you will not miss any annual fees that you need to waive and forgot about. Or any payment charges that you may miss and have late charges incurred.
If you are unable to ahere to these rules, then maybe you should think twice about carry credit cards.