Who hurt you?? Psst - It was credit cards
Published 6 months agoΒ β’Β 2 min read
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Okay, Reader, it wasn't credit cards that hurt you, but...
it was lies about credit cards. Namely, that credit cards are bad. Let's break down this money myth and settle this once and for all.
π π π Don't miss out! This is the 2nd part of our 8-week Money Monday series debunking common money myths that are holding you back - directly in your inbox |
The Lie: Credit Cards Are Bad
You may have been told that credit cards are dangerous and only lead to debt and financial trouble. Even if you know this isn't true, you may still hold onto fears of a spending slippery slope once you start using money that's "not yours." But the truth is that credit cards are only bad when you don't understand how they work or when they're mismanaged.
Don't have a credit card yet?! Here's how to pick your first one:
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The Truth:
If you pick the right card, there are responsible ways to use credit cards that won't lead to trouble, and credit cards actually present many benefits:
- Build Credit: Responsible use of credit cards can help you build a strong credit history. In the U.S., many things are difficult or even impossible to get without a credit history and a good credit score. For example, a car or a house. Some rental applications also ask for credit history.
- Rewards and Benefits: Many credit cards offer rewards, cash back, and other benefits. With a credit card, you're earning something for every dollar you spend. With a debit card or cash, you're just spending. Some specialized cards, like travel credit cards, offer great rewards like spending credits, lounge access, and more.
- Emergency Cushion: Credit cards can provide a financial safety net in emergencies. While it's not ideal to use a credit card to pay for something in an emergency, imagine how much worse it would be to need that money immediately and apply for a loan and have to wait because you don't have the cash on hand.
While these benefits are very real, they do depend upon you using your credit card(s) responsibly. Here are a few tips:
- Always pay your balance by the due date - interest fees should be avoided at all costs!
- Treat your credit cards like debit cards - only spend an amount that you actually have.
- Make sure you're picking the right credit cards for your budget and needs - a luxury travel card isn't the best fit for someone who doesn't travel often or is typically a budget traveler.
Next up, weβll discuss why cheaper is often actually more expensive. Keep an eye out!
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With love and empowerment,
Lora at She's a Lot
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For the Women Who Are "a Lot"
from She's a Lot Media Co.
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