Credit Cards – Three things I learned from them.

Credit cards are bad

Credit Cards: Friend or Foe?

Today I would like to talk to you about Credit Cards (gasp! no!!!!). I know, I know, credit cards are the ultimate evil. Right? Well, that is what most Dave Ramsey followers would say. In Financial Peace University, we celebrate when someone tears one up. Today, I would like to look at 3 things that I have noticed about credit cards (hint: I’ve owned one since I was around 18).

1.) Credit Cards can be incredibly dangerous.

I want you to notice that I said “can be” instead of saying are. Credit cards are an exercise in patience. If we can’t afford something right away we put it on a credit card. Now, if you do this for an emergency car repair, that’s one thing. If you do it for a new curved screen television… I’m sorry that’s wrong. Credit cards, even good ones, still carry close to 10% or more interest. Do you realize that even a decent savings account gives like 1-2% interest? That interest that you are paying each month is literally worse than flushing your money down the toilet. At least you can watch it spin around and around and maybe be entertained by it. Don’t get stuck paying interest!

2.) Your credit card balance is NOT money.

You see that number next to your credit card statement? It might say something like “available balance.” Well here’s the sneaky secret trick… that’s not actually a balance. Credit is considered negative money. So, your balance is actually the potential of having negative money. Some people see that credit limit as money that they can actually spend. This can be incredibly dangerous because, well, because of point one. You should NEVER look at your available credit limit as available funds. They are not available. That money does not belong to you. You have not worked for it, and despite what the creditors might say, you have not earned it. It is basically stealing someone else’s money and then promising to pay it back.

3.) Shhhh…. <_< … >_> don’t tell Dave Ramsey… You can MAKE money using a credit card.

I want to warn you right here. This is not some sort of get rich quick scam. Also, this technique should only be used by someone who can exercise patience and restraint. If you know that you are not a patient person and can easily get into trouble just owning a credit card… you are MUCH better off just shredding them and never looking back. However, if you are good at maintaining a budget and making sure that you always have some funds left over at the end of the month, you can actually get your credit card to make you some money.

Credit cards and debt

It’s crazy, but I am advocating owning a credit card and being debt free! You can have both!

Remember how I said I have had a credit card since I was 18 years old? I have said it before, but I have always naturally been very wise with money. Regardless of whether I have money to spare or do not, I have always managed to be very smart with. I am sorry for those it does not come easily to. I have my own weaknesses and struggles, but being smart and patient with money has never been one of them.

Okay, I can be responsible. So how do I make money with credit cards?

I have indeed had a credit card for almost ten years, however, I have never paid a single cent in interest. Never. I have my account set up so that the entire balance of the credit card is automatically withdrawn from my savings account. As such, I have never paid anything in interest. This means that I have essentially used my credit card as a debit card. I never use more on my card than I have in my savings/checking accounts. That’s step one, never pay a dime in interest.

Don't pay a dime in interest in your credit cards.

I have never paid a dime in interest after owning a credit card for 10 years.

Now here is where the fun comes in. My credit card gives me 1.5% back on every purchase. I use my credit card for everything I possibly can (except for my tithe, because using a credit card charges the church more). Even my rent each month goes on my credit card. I cannot tell you how much money I have made in the last 10 years from doing this. I know for sure that the number is… well, it’s in the thousands.

We were able to pay the pet deposit to our landlord using these rewards dollars. I purchased a new computer using this free money. Sure, I did have to spend money to get this money back, but a large chunk of it comes from my rent anyway. I also have my internet bill on my card as well. Basically, the money that I would have spent using a debit card I used on a credit card that acted like a debit card with rewards.


This doesn’t change the fact that credit cards can get you into a lot of trouble. Especially if you have more than one. I have one credit card, I have only ever had one, and I see no reason to get another one. Remember, I am not actually using the credit limit so why would I ever need more than one? My available funds are whatever is in my savings/checking accounts. The limit means nothing to me and I never look at it. Let me know what you think. Have you been able to own a credit card and reap the benefits without ever paying anything in interest? Or, do you know that you could not handle to pressure and instead to steer far away from credit cards?

If you haven’t taken a Financial Peace University course yet, I do actually recommend it. It’s pretty fun and there is a lot to learn.

One comment

  • Brenda Hoffman

    Nice reflection Zach and some very good, valid points. I, too, agree that understanding your money personality is THE most important factor when dealing with credit cards. Some can handle it, some cannot. Having financial goals and creating and working a plan to reach those goals requires discipline and action. Thanks for the plug for FPU!

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