After much debate, I decided to get my first credit card last Summer. It took some time for me to map out my approach to this decision, but I was excited to find the card that was right for me. I have heard numerous horror stories from folks who found themselves drowning in massive credit card debt, unable to fully pay off what they owed. Story after story, I almost decided to hold off and look into building credit in other ways. I sought advice from others, and had a co-worker here at Republic tell me something both simple and extremely useful: as long as I went into this treating my credit card like a debit card, and paid it off every single month in full, I would set myself up for success. This made me feel a bit better about my decision.
Here at Republic, a small group of us recently met up every Thursday for five weeks during lunch to sit in on a Dave Ramsey financial course. After each of the course videos would end, we would have an open discussion amongst ourselves about the course content. By far, the biggest topic of debate was the use of credit cards. Whether you’re familiar with Dave Ramsey or not, know this: he doesn’t believe in credit cards for a variety of reasons. This stance didn’t sit well with the majority of the group, myself included. Although his reasons are very sound, a group of us who could stack hands on responsible credit card use seemed to have some pushback.
Our in-house blog writer recently met with author and financial guru, JL Collins. We wanted to get his thoughts on a variety of financial topics, one of those being credit cards. Here is something interesting he had to say on the matter:
“There’s nothing wrong with credit cards. There’s a lot wrong with how people use them. You should never carry a balance on your credit card. You should only charge on it what you know you can pay for and pay off at the end of the month. And if you do that you will you know you’ll be shown as someone who’s responsible and who pays what they owe. The credit card company of course would much prefer that you carry the balance and paid them 18 percent or whatever. But that’s silly. And you know credit cards in this day and age also have the advantage of you can earn points with them and so they’re you know I carry credit cards and I think used responsibly, they’re a wonderful tool. But it’s it’s like any other tool you know. If you have a table saw that you use responsibly you can make beautiful things out of wood. Used irresponsibly, you can cut your fingers off. So it all depends on how you use the tool. You should be terrified by both table saws and credit cards.” - JL Collins
So, I wanted to see what the general consensus might be!
Here are a few questions I want to pose on this topic:
- Do you have a credit card?
- If yes, do you attempt to pay it off fully each month? What are some reasons other than building credit that you have the card you have (i.e. rewards , travel points , etc.)?
- If no, what are your reasons for not having one?
Please feel free to share your insight on the art and responsibility of having a credit card, or choosing not to have one. As someone who has now had one since August of last year, I’m always seeking advice and guidance on this topic overall.