The Yin and Yang of Credit Cards
Pros and Cons of Using Consumer Credit
Pro: Establish Credit History!
Opening a general credit card and using it wisely can help establish a good spending and paying record. This history will help when purchasing larger items, such as a car or a home. I did this when I was younger, and my children opened credit cards during college to help establish their credit histories.
Con: Overextending Credit Lines
Once you have good credit, everyone sends you a credit card application; I receive 2-4 per week. If you succumb to the temptation of easy credit, you can quickly find yourself overextended and unable to pay down your debt.
Pro: Buy Anything Online!
Internet shopping has exploded the last few years, and you can buy virtually anything online. Over half of my Christmas gifts were purchased online, coming from Washington and even Israel to my home in Pennsylvania. No physical store can compete with the selection of online goods.
Con: Binge Buying
Just because you can buy it does not mean you should. Items that look wonderful in a catalog begin to pile up at home, as do the bills.
Pro: Convenience!
Credit cards eliminate the need to carry large amounts of cash, making your wallet bulkier. Also, paying for gasoline at the pump is much quicker than having to stand in line inside the store.
Con: Impulse Buying
Having the credit card in your pocket means you can make an impulse purchase, perhaps for that flat screen TV or newer digital camera. It can be too easy to say "yes!" to a purchase in the vulnerable moment when it tempts you in the store.
Solution: Managing Your Credit Card Usage
Just as ancient man discovered fire as a useful but dangerous tool, credit cards are a helpful personal finance tool when used wisely. Plan your major purchases, saving ahead when possible to quickly pay off the credit card balance. Avoid using your credit card for daily living expenses unless you know you will pay it off with the next bill. View a rising balance as a fire raging and ready to consume your finances. Like yin and yang, recognize the strengths of credit cards but be cautious of their dangers.
Source: Smart, Ninian, The Religious Experience of Mankind, New York: Charles Scribner's Sons, 1969.
Published by Terry Magee
Married, father of two adult children with one grandchild. Author of In the Grip of Prayer. I enjoy teaching others and watching them grow. I also enjoy visiting National Parks and World Heritage Sites. View profile
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- Discipline in using credit cards is essential to good personal finance.
- Never buy on impulse. Resist salesman's lures of special deals that end when you walk out the door.
- Always ask yourself, "Do I need this, or do I want this?" before making a purchase.