credit cards just call me wishy washy

September 14th, 2007

Credit Cards? Just call me wishy washy

So, I’ve used credit cards irresponsibly in the past. There is no question of that.

And, it has been a very long time (if one can call multiple years a long time) since I have done that. It could be said I have seen the error of my ways and learned from it. That’s my story at least.

And I stand here looking at a future conundrum. Not a current conundrum, because there is no way I am going to start using a credit card right now while I am still in credit card debt, no matter how organized or efficient I might think I could be at it.

But at some point in the future, I will have no credit card debt. And I might, then, start using a credit card again.

Say it isn’t so! ;)

This is what I keep thinking about. I started this blog in part to help myself learn about and make better financial decisions. And I think, in many ways, I am accomplishing that. I’ve become better at tracking my money. I’m much better at not spending it. I’ve increased the amount I snowflake by a whole lot. And I have learned a lot of things about…. credit cards. Some bad, but some potential good too.

It is all about my coupon/rebate/freebie loving nature. The word is… cashback. Say it with me…. cashback.

Doesn’t that sound so… nice? Enticing? Happy? I know it is supposed to. I know it is supposed to give me nice happy warm feelings of gooeyness right inside my stomach. Cash………back.

If I am going to spend money anyway (which I am, I mean, one needs to eat) and I can get basically a rebate on everything I buy in the form of 1-5% (depending on the car and the purchase) back in cash at a later date well…. wouldn’t that be a *good* thing? Wouldn’t that help me out?

But what about all those studies you hear about that when you use a credit card, you inherently spend more? I believe that it is generally true. I know for myself, before I started the zero-based budget and completely tracking all my spending, I was definitely spending more with my debit card than I would have if I was carrying cash. The flip side to that is I may not have spent as much at the point of sale carrying cash, but when I carry cash I tend to be sucked in to those little purchases, the latte factor if you will. I never bought more actual lattes than when I used to carry spare cash in my car ashtray and I drove past a Starbucks taking my son to and from preschool. So I may spend less at the grocery store if I have cash, but I spend any change on a pretzel on the way out and a vanilla half-caf latte the next morning when I am barely awake.

Since I have started the “hard-core” budgeting and the zero-based every dollar working for me philosophy though, I have reduced overall spending. I may still spend too much at the grocery store, but I definitely pay more towards my debt every month and have more available cash left over to do so. So I could handle a credit card, right? I mean, I’m doing this right now with a debit card with is also a bitty piece of happy plastic….

I guess it comes down to… do I feel credit cards are inherently evil? Do I think I could behave responsibly with them and make *credit* work for me in the same way I want to make *cash* work for me? Do I really believe I have changed in the core of my nature?  And is the cashback (I still love the word….) worth it?

I don’t know yet. I still have at least a year to find out though.  The best lessons take the longest I guess.

~J

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6 Responses to “Credit Cards? Just call me wishy washy”

  1. Perhaps an option would be to get a card limit that’s the same as your budget is today, (or when you actually get the card). Then you could use it the same way as you do your debit card and pay it off with your pay each month?

  2. I find that when I pay cash at the grocery store, the amount that I spend on groceries doesn’t change, but the 15€ or so that’s left over from my 100€ withdrawel… gone. And on who knows what! My gut feeling is, that if you’ve gotten into the habit of tracking your expenses, and not spending more than you can afford, than a credit card with a good cashback/rewards program is not necessarily a bad thing. Afterall, you could try it for a month, and if you go over your self imposed limit, nothing says that you have to use it again.

  3. I love credit card cashback rewards! We have a Discover card, and have had it for five years or so. We never carry a balance. I’m never even tempted to spend more than we have even though I could just put it on the credit card. Other than that mindset what has helped us is that our credit limit is really low, we could max out our card in a month and have no trouble paying it all off. We follow a budget, so in my mind the card is just a means to pay for things we need, not a way to get things we can’t afford at the time. I often do go over budget in various categories(I’m working on that!) but I feel confident that the fact that I often use a credit card isn’t a cause of that. We mostly use the cashback for splurges, like a restaurant gift card, or stuff we need, like a Staples gift card so we can buy printer paper and ink cartriges. I’ve used it to get gift cards for Bed Bath and Beyond to use as wedding gifts. I think you’ve learned a good lesson about credit card debt and as long as you stay determined to spend according to budget, I imagine you could use a credit card wisely to take advantage of the cashback benefits.

  4. @debtdieter – that is an idea…. my credit limits are rather high which might be part of my reservations.

    @Kelly – I have the same problem with cash too. My change goes into some black hole involving coffee, treats, and other sundries. lol

    @Alison – I have a feeling I might love cashback rewards too. :)

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