How Millennials Became Spooked by Credit Cards

Pizzagirl
Fri, 19 Aug 2016 05:42:15 +0000

@jrcsmom, one of the things I value about CC is that people call it like it is. We don’t tell the 2.5 GPA kid that he should apply to Harvard and we tell the 4.0 kid he still isn’t a shoo-in.

With that in mind, please take this in the spirit in which it is intended - helping you.

You said earlier “And I acknowledge that comes with a higher APR, but I choose to make educated choices about when I choose to use that debt and how long I choose to carry a balance. I understand my finances well enough to decide when it’s in my best interest to pay $20 to use the banks money for a month.”

I have to ask what source you are getting this education from. Because there is no source - whether it’s Dave Ramsey, Suze Orman or the like, or a credit counselor or financial adviser - who would say that someone who doesn’t have $1500 on hand should be planning to take a $1500 vacation. Even if you can get a deal on passenger number 2.

If you are dead set on the vacation, then the only smart way to do it is to save the cash each month and then go on it - not finance it. Financing / paying interest is almost never a good idea for a completely optional / discretionary purchase. Credit card debt is a Bad Thing and should be reserved for needs (new transmission to get to work, new refrigerator when the old one breaks, health care).

However. I am willing to bet most of them would also say that as close to the bone as you are - a single mother, already with credit card debt, and for whom $109-150 a month is a big deal - you shouldn’t be spending $1200-1500 on a vaca in the first place. You should be building up your cash reserves so you don’t have to resort to credit next time you need a new transmission, and you should be working on a plan to pay off your existing cc debt.

CC debt is evil. You’re thinking like a poor person - oh, I’d like a vaca, I can just finance it, it’s only a few dollars and it’s less than my car note. No. That will keep you poor. Rich people get rich by doing smart things with their money. And even rich people get poor by spending more than the cash they have on hand. I know; I’m cleaning up after a relative who went from 7 figures in the bank to $63k in cc debt. Because they thought that it was somehow “clever” or “smart” to have cc debt.

I would hate to see something bad happen to you. I really urge you to get out of the mindset that “I can always finance it”. And I urge you to distinguish between needs and wants. Best of wishes.