Wednesday, September 3, 2014

Reader's Question Answered: Why I THINK Credit Card is A Trap ( Life WithoutCredit Card)

A reader emailed me asking me to explain why I think credit card is a trap. He is probably referring to this post: Penny-pinching Tips for OFW.

Note: I am not trying open any debate about the pros and cons of having credit card or persuading anybody on changing his/her views about this matter. This idea is mine and mine alone. We might not have the same views about it, that's okay. To each his own.



I started reading your blog only now via my friend JF ( Note: I didn't ask the sender if I can post the full name of the person he is referring to ) who also happens to be my financial planner, and I was intrigued by your statement, "No to credit card. It's a trap." ( Emphasis added)

I have quite a number of credit cards and most of them were given to me without applying for it. I only use 2 credit cards and I always pay them in full and on time as I know how high finance charges and penalties can go.

Can you shed more light on your aforesaid statement.

Thanks and God bless!

- rclionheart


I avoid debt like the plague.

Modesty aside, I never had problems with debt. In fact, I don't use credit cards. Never had it and, hopefully, never will. Why? You might ask.

Studies have shown that paying with "plastic" increases spending because, when you pay with plastic, it takes away the emotional pain associated with handing over your hard-earned cash. It rings true to me and, it is also true with debit cards. I use debit card but, whenever I use it for everyday purchases, I tend to overspend that's why I only spend in cash.

Debit card or check card acts like a credit card but, you can't spend what you don't have, otherwise, the bank will charge you hefty overdraft fee. Personally, I don't use it regularly, only for bills or whenever I want to shop online. I withdraw cash good for one week as my allowance. (If you want to know more about this little trick of mine, click here.)

Why complicate my life with credit cards? Because, duh, you can get free stuff, free plane tickets, free meals, etc...

The fact that you have to spend money in order to avail that airline ticket doesn't make that ticket free. Why would I overspend just to score few perks? Why? It doesn't make sense to me! I'd rather have a lot of cash than a lot of perks!

You might say: I can totally manipulate credit card companies in my favor.

Last night, I watched a documentary entitled Maxed Out - how two college students committed suicide because of insurmountable credit card debts, how an elderly woman drove her car into the lake because her husband was about to find out her "secret life full of debts", how people wanted bigger houses.... on credit, how credit card companies target low-income people. Truly an eye-opener on how too much debt could ruin lives. If you have the chance to watch it, I highly suggest that you do.

If you can truly manipulate the credit card in your favor then congratulations! You are one of the few! For me, I'd rather spend my time doing stuffs that interests me than crowd my mind with schemes to outsmart credit card companies.

Besides, I wonder if rich people got rich because of credit card perks? Was it part of their "game plan" while on their way to being rich? Hmmmm, curious!

If going home for good while everybody wants to go out of the country isn't weird enough, having no credit card while everybody has one or three is equally weird!

Well, I'd rather be weird than broke.



  1. Another insightful post! You are killin' it!

    I wish to be like you!

    1. Really?!

      My life is a "bore" my friend. Nobody wants to be like me! Haha!

  2. Right, to each his own. For me, having just one credit card at present works fine. I pay it in full now, unlike before when I would only pay the minimum dues. I learned my lesson the hard way because I had some credit card debts before. It was not a lot of money but for the state of my finances then, I felt like I was already in a big trouble. Good thing it's over now and I won't let it happen again, ever. :)

    1. Congratulations! Credit card is a double-edged sword, it could hurt you or help you. You have to know which side you want it to be.

  3. I totally agree with what you said, you nailed it. I myself don't have credit card too. I don't trust myself when it comes to the discipline I should have with regards to credit card use so I'd rather have none. I've seen office mates getting miserable with credit card debt and I promise myself never to be like them.

    Btw, you have a very insightful blog. Thanks for sharing, keep the posts coming and Gob bless to your endeavors!

    1. Hey Sam,

      Yah, there are people who can stand having a stash of cookies in their houses, there are some who can't or they'll eat it all and get fat. Nobody wants to be fat! It works with credit card,too. Some avoid it, some can control it.

      Thanks a lot, by the way!

  4. hi "miss pinas", u really are very good in sharing your thoughts & insights here.

    as for the credit cards, yes i agree with u owning a credit card is a headache (got 10 credit cards before now its down to 4) but it also has some good points too.

    I love reading your blogs, keep posting. God Bless!!!
    (ok lang ba if i call u miss pinas? i dont know how to address u properly.)

    1. Wow, I'm glad you trimmed it down to 4! It must be hard keeping track of 10 credit cards!

      Yah, you can call me whatever you want just as long as it's not my real name or I'll be damned! I revealed too much in this blog. It's nice to be anonymous coz you can really express what you think.

      I am still thinking of a nice pseudonym, though. Hopefully I'd come up with one.

      Thanks, as always.

    2. yup sakit tlga sa ulo, i was trapped into thinking the new cards i got was better than the ones I'm using that time.

      thanks again.....

  5. IF you live in the US AND plan to stay for long, credit cards are relevant to build credit scores. BUT again, one has to know how to use it. Treat as cash. That's how I view it.

    The credit card trap is one that OFWs in Dubai have always fallen into. Debt is one of the top reasons why Pinoys are jailed. And it is just sad.

    Thanks again and really do hope you continue to post more :)

  6. Very good explanation! Exactly the same reasons I don't own credit cards. My motto has always been, " If you can't pay it in cash, you can't afford it".

    Love your line: " I'd rather be weird than broke". Exactly drove home the point.

    Good luck on your return home to the Philippines. We surely need sensible people like you here in Pinas :)

  7. I totally agree! Credit cards can trick you into overspending because of the perks or because "you could always pay for it later". One of my errands every month is to go to the bank and pay for my father's and my mother's credit cards, and whenever we're late in paying for the bill, we get charged for paying late. Credit cards are more trouble than they're worth. I'd stick to my BPI More Fun Prepaid Card instead.

    1. Thanks for you input. There is always dark side of everything. How can credit card companies make money out of you if they don't charge you hefty interest fees? The peace of mind of not having credit card is all worth it.


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