I was never taught about credit cards before or after I left off to college and the average American doesn’t. I had to learn about credit cards the hard way. I thought making the minimum payments each month would be fine but that was the problem, I did not pay them on time. Before I knew it I was a broke college student in debt.
After doing some research I learned that consumers either use credit because its convenient or they use it if they lose their job to make everyday purchases. According to Richard (2010), when college students develop bad habits for using credit cards in college they can carry that bad habit over into their every day life. For every myth there is a truth behind it. The truth is according to Dave Ramsey (2009), there is no positive side to credit card use, and you will spend more if you use credit cards.
Using cash is better than using credit cards. When you use cash in a sense you can feel your income leaving from you. Using cash also helps you manage your money better, example: you can not spend what you do not have, compared to with a credit card you can spend what you do not have and regret it once your statement comes at the end of the month.
Credit cards are not 100% bad in my opinion; they can be used as a tool to help build your credit rating. Using your credit card(s) to pay a few monthly bills is fine as long as you pay the card(s) off in full when the bills come.
At the end of the day cash is always king!
~Cortez
One Comment
Hi Cortez,
Spoken like a true “financial planner”.
When spending cash you demonstrate a little constraint in comparison to using credit cards. Just paying the minimum on the credit balances is the “hook” that prolongs the debit and this is one of the many ways the credit card companies makes “billions” a year in profits. I am not against making profits but most people don’t realize that behind every “debt” someone is on the outside collecting income which is an “asset” for them which producing income.
Good insight and keep learning and growing.
S