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.
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Hi!
- rclionheart
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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.
.
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
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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.
.
