There are so many articles out there; “Do I need a credit card?”, “Why everyone should have a credit card”, and my favorite “Why I hate credit cards”. There are people on both sides of the debate, even just in my family, some swear by their cards and some eschew them as the devil (the cards, and sometimes the family member too).
The great question becomes: to have a credit card, or not?
I have parents who are great at using their credit cards to accrue points, save money at certain stores, and all sorts of credit card-y other stuff. On the other hand, I have a family member whom I wouldn’t trust with even a debit card. She is not very good with money and is a poor planner. (That person is me by the way)
I came out of college with high hopes and a firm disillusionment about money. I was that person that would worry about how I was going to pay the electric bill, so I would go to the mall and spend money I didn’t have to feel better. I was kicked out of apartments (plural) because I had spent the rent money on other things, things I didn’t even need.
I don’t think that my vicious cycle would have ended any time soon either, except I found out I was pregnant. All of a sudden I realized that I was going to have to grow up, quickly. I started listening to my parents (something I should have started years before) and reading anything I could get my hands on about taking control of your money.
I married the guy I was dating and settled into marital bliss, except, I never thought that my perfect husband that I had set on a pedestal would have financial feet of clay. His idea of a food budget was eating out until the money was gone and then eating at other people’s houses until the next payday. The day he came home with a credit card was the beginning of the end. 2 years and innumerable money fights later, a divorce attorney was hired and that was the end of that.
I never took out a credit card because I knew that I wouldn’t be able to pay it back. Even in the worst times, I never thought of a credit card to pull myself out. Now, I am much better with money and follow many different wise people’s teachings on money, but I will never touch a credit card for fear of what my nature could do with it. Rather like the One Ring in the Lord of The Rings, I would take the card, meaning to do good with it, but through me it would wield a far greater and darker power than you could ever imagine.
The main question here, is: are YOU qualified to have a credit card? Sadly, I don’t have the time (or money) to sit down with each of you, have a cup of coffee, and learn your financial strengths and weaknesses. So instead, I have created a little quiz, so that you can see if you should get a credit card.
In order to give yourself a firm ‘yes’ or ‘no’ credit card answer, take the quiz and see how you score. For each a. answer, give yourself 5 points. For each b. answer, 3 points, and 1 point for each c. answer. Begin!
When you get a bill from your internet company, do you:
- Not worry because it’s already built into the budget and on Auto-Pay.
- Throw it in your pile of bills and send a check in the mail on the day it’s due (or whenever you find the bill).
- Get 3 reminders from the company and finally pay it when the internet is shut off.
It’s pay day! You know you need to get groceries, do you:
- Already have a grocery list based off your menu plan, go to the store and buy just what’s on the list.
- Go to the store and buy a bunch of ingredients and ready-made meals with no clue what you are making yet, only to get home and find you’ve forgotten something important.
- Groceries? What are those? I eat out so I don’t have to do dishes.
Your car’s tires are bald and you should probably replace them, do you:
- Drive to the tire store and pay cash from your tire fund to get 4 good quality new tires.
- Stretch it as far as you can, then go to the tire dealer and get 4 of the cheapest new tires they have.
- Drive those puppies until they pop! You have a spare for a reason and the tire place always has some used tires with a few miles left they can put on for cheap.
Christmas time! The most expensive time of the year has snuck up on you…again, do you:
- Not stress, you’ve been shopping since last Christmas and have the perfect gifts (at great deals too!).
- Spend days and days at the stores from Halloween to Christmas looking for the perfect gifts for everyone at decent prices.
- Take out one of those nifty ‘Christmas loans’, then run to the store and buy everyone something really nice…and expensive, since you have money in your pocket!
It’s the end of the month and your budget is already tight, some friends invite you out to dinner, do you:
- Politely decline, explain you can’t spend the money right now, and instead arrange everyone to have a potluck at your house one night.
- Borrow some money from another budget category and promise next month you won’t eat out at all.
- Go for it! You don’t want to look cheap or broke. You will make it up later with extra work or something will turn up.
Tax time! You’re getting quite a chunk back this year, do you:
- Already have plans for your money. A little into savings, a little investing, and paying off the rest of the car loan.
- Not really know what you are going to do, you should use some of it to pay some extra off on that loan, but you deserve to spoil yourself a little too.
- Shopping time! You don’t want to wait for the refund, so once you know how much you’re getting back, you get a tax advance and go to the mall (or the sporting goods store).
6-12: Don’t do it! You don’t need another collection company calling you to get their money.
13-22: Be careful. You could use the card for good or evil. You will need to keep on top of your money and pay attention so you don’t fall into a ton of debt.
23-30: The sky’s the limit! It sounds like you have your financial life together and make your money work for you. Put it to good use and earn some points or cash back.
A few years ago I would have scored a solid 6, maybe 8 on a good day. Through hard work and a lot of studying, I am able to say that I would score a 30. Even though I score high, I know me. I wouldn’t trust me as far as the closest Bed, Bath and Beyond with a credit card. So in the end, it comes down to YOU and what you know about yourself, will you use the card for good, or great evil?
I am not a financial adviser and my opinion should not be considered gospel. I am coming from experience, every one of those answers above is something I have personally done, but my advice is just that, advice.
How did you score?