Credit Card – Friend or Foe?

For the past 15 years or so, I’ve been what I call a “cash buyer”. Meaning I’ve had NO credit cards.  If I didn’t have the cash to pay for something, I simply didn’t get it, or I saved my money until I could afford it.  I wasn’t always this way – when I got my first apartment at twenty years old, I was sucked into the whole credit game when I wanted a new bed and didn’t have the cash to get a new one. One day while simply “window shopping”, I was admiring my dream bed, a beautiful heirloom cherry 4-poster variety, when the salesperson told me about their in-house financing.  Huh?  You mean for only $35 a month, I can have this big, beautiful bed? And I can even get the fancy mattress to go with it? SOLD!

It didn’t take me long to learn that my $1100 bed and mattress set, at $35 a month and 27% interest (yes…I said twenty-seven percent!) cost me a whoooole lot more than that. I made a few other minor financial blunders in my early twenties and after finally getting them paid off, I cut up every card I had and said “NEVER AGAIN!”  After that, the only other thing I ever financed was my education and a car, and even the car was only because the one I had been driving for 11 years was totaled, and the insurance money wasn’t enough to cover the cost of a reliable used car.

Being a cash buyer has tremendous benefits. No, I sometimes didn’t have as much as a lot of my friends (who were in debt up to their eyeballs, but they did dress well!) but it did keep me from accumulating a lot of stuff I didn’t need. I had a method – if I wanted something, I gave myself the “7-day rule”. If, after 7 days, I was still itching to get whatever it was I had wanted to buy, I’d get it (as long as I had the cash for it). I would say that 99% of the time, I would completely forget about whatever it was I just HAD to have only a week prior. Plus, although I didn’t realize it at the time, the fact that I didn’t have a whole houseful of stuff came in handy when I decided to move onto a sailboat to go cruising!

Which brings us to now…confession time: I caved about a month ago and got my first credit card in about 15 years.

credit card mastercard on chart

I know to most people, having a credit card is the norm and no big deal, but I didn’t make the decision to get one lightly. It’s not that I’m financially irresponsible (unless you consider selling all of your stuff and buying a boat so you can eventually quit your job to cruise the islands full time financially irresponsible), but for me, I love not having any debt. Owing money to someone, especially an unseen group of sharks* people who only know me by a number, who don’t give a crap about my well-being, well, that makes me feel trapped, and the whole reason for choosing this lifestyle is to feel FREE.

There are a couple of reasons I caved in the end:

  1. Emergencies.  While we have what’s called a “cruising kitty” to cover costs, we do realize that there may be a time when an unexpected expense, be it a boat repair, medical expense, etc. comes up and it would allow us to take care of said expense if necessary without dipping into our cash.
  2. Car Rentals.  You see, there are times when we would love to rent a car to take a road trip, or to just drive around to do some sightseeing, but we were unable to because of the fact that we had out of state drivers licenses and no credit card. A few rental agencies will allow you to put the deposit on a debit card, but we’ve not found one that will do that if you’re from out of state.
  3. To Maintain Good Credit Status.  Even though my always-on-time vehicle/student loan payments helped me keep my credit score good, now that I no longer have that payment, having some sort of revolving credit will help me keep my credit in good standing. One of these days, we hope to purchase a small plot of land and build a little house (although I don’t plan to get off the boat any time soon!) so maintaining my good credit is necessary. Simple as that. Isn’t it ironic that being a cash buyer who lives within their means can be a bad thing to creditors?  You have to be in debt in order to qualify for more debt?  Yes, stupid.

I got my card through Capital One and it has a decent cash-back rewards program – I mean if I’m spending the money anyway, I may as well get something back, right?  I also will be paying it off in full each month. What do you guys think about credit cards?  Do you pay cash for everything? Let me know in the comments!

 

*Shark is too nice of a word for the way most credit card agencies work, as sharks are actually magnificent and interesting animals who get a bad rap just because they do what they were born to do.

2 Comments

  1. Good post Mel! – I too had the rude awakening of the trusty “credit card” companies in my twenties. Thankfully Tom swept me off my feet credit card debt (all $2500.00 of it) and all and from that point forward, I vowed to never pay another cent of interest. We too have a Capital One Venture card (double miles for every purchase) because we use it for airfare. We buy virtually everything with it. It’s a great way to keep track of your spending, but it’s paid off every month- no exceptions. Other than our home mortgage, we have no debt and that’s the best feeling in the world. (I also have another Visa that’s our “safety” card in case the Capital One should get hacked. I keep my business expense purchases on it for tax purposes but otherwise don’t use it)
    -C

    Reply
    • That’s awesome! I’ve been using it for everything, too. Get the perks and pay it off. If done responsibly, it can pay off.

      Reply

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