Dependency on Credit Cards
Over the years we have become more and more comfortable with using credit cards. Swiping the credit card has become second nature. The general consensus is that we need credit to make any major purchase. In order to gain credit, we need to have some sort of credit card. But what if we reframe our thinking. Is the use of credit cards keeping you from reaching financial independence? The dependency on credit cards has caused some to become financial crippled. For those who have a difficult time paying off the balance in full each month it may be time to cut up the credit cards.
Before the invention of credit cards as we know it today goods and services were paid for in cash. See my blog post on the history of credit cards. Of course there have always been instances of advancing credit, but the way in which we use credit today has not always existed.
The Problem with Depending on Credit Cards
Credit cards, although created to help the consumer, have created a financial dependency that for some is crippling. Credit cards exist to assist consumers pay for goods and services even when they don’t have cash. The majority of credit cards use revolving credit. With revolving credit, the consumer does not have to pay their credit card bill in full each month. This revolving credit puts some consumers in a never-ending cycle of debt.
We as a society have become more and more dependent on using credit when we don’t have the cash to pay. This dependency on credit cards becomes an issue when you are not able to manage your finances. When you are in so much debt that you don’t have enough money for your daily needs. And although you want to get out of credit card debt you don’t have the available funds, so you end up charging it to the card. This dependency on credit cards is also an issue when you see the credit card as your emergency fund. Using credit cards as an emergency fund can put some in a financial hole that they are not able to dig themselves out of.
Becoming Less Dependent on Credit Cards
But you don’t have to be so dependent on credit cards. You can take the steps necessary to get out of credit card debt and remain debt free. If you are someone that does not have the discipline or the funds to pay off your balance monthly, then credit cards are not for you. If you are disciplined enough to pay off your balance in full each month then make wise choices in how you use your credit cards. But whatever you choose resist the urge to have multiple credit cards. Having multiple credit cards increases the likelihood that you will get into more and more debt.