FP Article 18
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Credit Cards
- Friends or Foes?
by Rajen Devadason
In the hands of a naive or undisciplined man, a
credit card can have the same effect on fiscal
health as an unpinned grenade can have on
physical health!
Rajen Devadason
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Almost all of us have a love-hate
relationship with our credit cards.
We love them
because we know that as long as we
have them in our wallet or purse, we
are 'safe'. Even if we run out of
cash, our plastic is there to bail
us out.
Unfortunately,
many of us have also come
face-to-face with the ugly side of
credit cards. Just as ancient sirens
drew mariners to their deaths
through irresistible calls, our
credit cards have the power to trap
us! |
They usually do so by luring us into believing
that it's entirely permissible to buy that which
we have not yet earned the right to own. Any
time you hear or see an advertisement that
hinges on these three magic words 'You Deserve
It', beware!
Of course, not everyone has a
problem with credit card debt. But a lot more
people do than you probably would imagine. You
see, for many people, rampant credit card
balances are a source of secret shame that they
don't care to share with others around them.
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This is an article on understanding
the pros and cons of credit cards. I hope you enjoy
reading it. But if it isn't what
you're looking for, you're welcome
to search for something that better meets
your needs. Thank you for allowing
me to serve you.
Rajen Devadason |
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But that's not to say that credit
cards are evil inventions of the devil! Of
course, they aren't. In the right hands, when
used correctly, they can be a source of safety,
security and sanity.
Let me explain:
Safety - It is usually a
lot safer to walk around with one or two credit
cards in your wallet than to saunter along busy
urban jungles with fat wads of cash visibly
swelling your pockets.
Security - If you've ever
driven into a strange town at night, exhausted
and needing to check into a hotel room where you
can have a hot shower and climb into a bed with
clean sheets, then you know how great a source
of comfort and security a credit card can be.
Sanity - When you've had
one of those months that everyone has to deal
with at some stage, when the money runs out long
before the next pay cheque, you know how much
calmer and saner you feel knowing that your
credit cards are there to magically allow you to
reach into the future and tap tomorrow's funds
for today's pressing needs.
The fact that this site is credit
card-enabled shows that I understand the
potential benefits that can accrue from correct
usage of those pretty pieces of plastic.
For instance, if you wanted to
buy one of
my ebooks or eReports because you craved
practical, usable teaching in life planning or
goal-setting or time management or mission
statement crafting... you get my drift, you
would need a credit card to do so
here.
Unfortunately, when that same
piece of plastic is used incorrectly, as it
often can be, a credit card can become a plastic
prison that impoverishes you!
This happens because many people
do not realise that running a charge on a credit
card is EXACTLY the same as spending cold, hard
cash... only more so.
Studies have indicated that some
people spend between 20% and 40%
more
during a shopping spree if they pay using their
MasterCard or Visa credit card than if they were
to rely solely on cash.
Fancy carrying out an
experiment?
Tomorrow, go out to your
favourite store with only cash in your pocket.
Buy whatever strikes your fancy. See how much
you spend. Write that amount down.
Then wait a few days and return
to that same store. This time make sure you have
no cash at all in your pocket, only a couple of
credit cards. Again, see how much you spend.
Write that sum down.
The difference may be staggering.
So, in closing, if you plan to
manage your money well throughout the course of
your entire life, be careful. You want your
finances to work for you; not vice versa!
So, please take the time to look
long and hard at your credit card usage
patterns. If you belong to the minority
that is able to handle credit cards well, then
please continue doing so.
But if you are part of the
majority that is constantly in the position
of having to pay late charges for not settling
your credit card bills in full each month, then
do whatever you need to do to make things
better.
Track, measure, research, read,
think and plan your way to fiscal
responsibility! Toward that end, you might find
it beneficial to read my article
Escaping Debt Slavery.
© Rajen Devadason
