Wait, Are Credit Cards All That Bad?

By Rene Santana on October 28, 2019

I have so much debt and that causes me stress to turn my head and look at it. But none of it is credit card debt. It’s all just from having a college degree really, and a car loan. I’m more than thankful that I have a car to get places. And while my bank account may say differently, I’m rich in experience from my time in college. But as I continue to fork over almost half of earnings to bills, why would I even bat an eye to credit cards? Because unlike my college and car loan, credit cards offer benefits.

Image by krzysztof-m from Pixabay

Disclaimer: Don’t get a credit card if you are unable to make your basic payments. This will damage your credit score and pigeonhole your finances. Proceed at your own risk and discretion.

Even if there aren’t any benefits, sometimes buying something on credit is the way to go. But before you can even consider a credit line, you have to know when you can make that last payment.

There is nothing inherently bad with credit cards. It’s the faux limitless power it gives you that can push you to make foolish decisions. Learn to tame that power, and then you got something manageable. And while credit cards and banks make money off you with high-interest rates and fees, they at least give you rewards and benefits to enjoy as you spend more.

But what do you do when you’re in a real pinch and you need currency to pay for life’s necessities? With no money in the pockets, your next option may well be credit. But proceed cautiously. When I say “no money in the pockets,” I mean that if you have made a budget and are able to afford your cost of living, you may not have enough for when something big happens that’s out of your budgeting control.

Credit and money are two different forms of currency, as credit has no inherent value and is merely borrowed money. Just don’t rely on credit cards to do all your spending. It might be that you’ll need a bit of help to do maintenance on your car, a plane ticket to a wedding, or even attend a much helpful and educational conference. Whatever the case may be, if you know absolutely sure, 100 percent, that you’ll have the money to pay for it later, then I’d suggest opening up that credit line. And as one of Christy Bieber’s strong reasons to get a credit card,  “many credit cards also provide a 0% promotional APR on purchases for a limited period of time when you first open the card.” Along with this, another one of her reasons is “it’s very common for credit cards to reward you for becoming a new member by giving you bonus points, miles, or cash back.”

In terms of security, credit cards have the best safeguards. It’s not so much the fancy tech that helps spot fraudulent activity as it is the fact that you’re not losing any actual money. If someone racks up charges on your credit card account, you’re not out anything but sometime in the afternoon to sort out the mess. If the same thing happened to your bank account, then that’s a bigger headache and then you’re actually out of money.

Consider this example from Casey Bond’s article on credit card safety, “if your credit card is lost or stolen, you are responsible for no more than $50 in unauthorized charges. Often, card issuers will not hold cardholders liable for any unauthorized charges at all.” Now if that were a debit card, you’d have to “notify your bank after two business days, [as] you might be liable for up to $500 in fraudulent charges.” And bring this point home, bond states “since credit card purchases are made against a line of credit and don’t draw directly from any bank account, your personal funds aren’t put at risk if the card is used fraudulently.”

Over and over again, I’ve reconsidered getting a credit card, but I never have a dire reason too. I don’t want to pay interest rates since I am already with my student and car loans. But since most of the credit cards I’ve seen don’t offer an annual percentage rate (APR) interest rate for a year, I keep the option open. And why not, especially since I could in on those cashback deals. It’s when life happens, or rather when my car breaks down (because that is life), that I’m ready to ding my credit score for a new line.

At least I know I can pay for it later. So if you know you can pay for a big need across a few months, then is opening up a credit card such a bad thing?

CWU Graduate | Writer | Editor @WaldorfPress | Favors Tech, UX, and the Serial Comma.

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