Credit card offers are everywhere. The ads are stuffed into our mailboxes, written on free t-shirts at college campuses, and even uttered by some pretty well known financial buffs on TV. But before you sign on the dotted line, it’s a good idea to think twice and consider some credit card alternatives. Should you really apply for that new card?
Growing Up with Credit Cards
Like many of you, I grew up watching my parents use credit cards. They earned some airline miles, got some cash back, and as far as I know paid off the balance every month. You might say they were “responsible” credit card users.
They explained to me that one day I too could have a credit card. After all, it would help me build my credit score and allow greater financial freedom when I grew up. I’d even be able to afford a mortgage and get a house of my own!
Before long, I viewed the credit card as a gateway into adulthood. That shiny new piece of plastic was more tempting than a Wonka golden ticket, and I wanted one now!
Then I received it in the mail. It was a brilliant blue. It had my name on it. It’s was my very first credit card from Chase! I was a responsible adult and paid off the balance every month, never paid it late, and made sure I spent within my means.
Rethinking the Use of Credit Cards
Four or five years later after I received that card I began to question the use of credit cards in my life. Were they really necessary to get ahead? Moreover, was I spending more money with my credit card than I would be with a debit card or cash?
Soon I came to the conclusion that the use of credit cards in my life represented a major risk. What if “Future John” wasn’t as good at paying off his credit cards every month? What if “Future John” had to pay a lot of interest? What if “Future John” began to solely rely on the “security” of owning a credit card instead of finding ways to save money and increase his income?
I took out the scissors, grabbed my two credit cards (yes, I had two at that point), and cut them into pieces of celebratory confetti. Yay!
Why Shouldn’t You Apply for a Credit Card?
I don’t expect to convince all of you out there to cut up your credit cards. All I ask is that you consider three reasons why you can do without one:
1. You can now earn cash back rewards with a debit card.
That’s right, you can finally get a cash back debit card. The nice thing about this is that we’re earning over $300 a year and payments are deducted straight from our checking account. Unlike a credit card, we don’t have to worry about paying it off every month. That’s a pretty sweet deal.
2. You can “lend yourself money” by getting on a really good budget.
You won’t have to rely on credit cards for everyday expenses or emergencies if you learn how to make a really good budget.
On commission? No problem. Add a line item to your budget called the hill and valley fund and use it like you would the “take a penny, leave a penny” jar you’d find at your local convenience store.
3. The Bible says it’s not such a good idea.
Scripture is pretty clear that going into debt isn’t a good idea. Why play games with credit cards? Consider some of these verses:
The rich rule over the poor, and the borrower is slave to the lender. – Proverbs 22:7 NIV
Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you. – Proverbs 22:26-27 NIV
It is better not to make a vow than to make one and not fulfill it. – Ecclesiastes 5:5 NIV
Let no debt remain outstanding, except the continuing debt to love one another, for whoever loves others has fulfilled the law. – Romans 13:8 NIV
Allow me to be clear: it is not a sin to own a credit card. However, I think it’s pretty clear that owning one is a bad idea or risky venture at the very least. If you are a “responsible” credit card holder, I’m not mad at you. After all, I was one once upon a time.
Do you agree with John that credit cards aren’t a good idea? Let us know your thoughts in the comments.