Your Credit Advantage – Part 2
Bad, Great, Not Enough, and No Credit – Part 4
Up until now, I’ve painted a pretty good picture of how against credit cards I am. But I need to come clean, I’m not totally against credit cards; I’m against undisciplined people having them. I’m against people who don’t have a plan and allow credit to wreck their life-their business. I’m against people being abused by what they don’t know and that’s how to properly use a credit card.
I recently received some feedback that had this question, why didn’t we know this stuff 10 years ago? Wouldn’t that have been helpful? So I did some thinking and would like to ask you to do me a favor. Pass this information along to someone you know. I would like every recipient to pass it on, forward it or share it on your social networks. It’s too important to allow those close to you to miss out. And for those who will and already do, thank you.
Be a Responsible Credit Card Holder
In this post I am going to totally flip the switch. I’m going to give you some indicators which will let you know that you are ready for a credit card and can use it for your benefit. Think of it this way, you’d never give your 12 year old keys to your car to take it for a ride. Why? You need an experienced driver, driving your car. You want someone who’s been trained and has the knowledge as well as the license to drive. In the same way, we should be this restrictive regarding having a credit card. I believe that credit cards do more damage than inexperienced drivers. With that in mind, remember you should run your life like a business because it is, yours.
When it comes to credit cards and managing your money you must be willing to give every dollar a name. What does this mean? Have a plan for your money. You must be intentional about what you plan to do with it and be strict about following the plan. If not, it will soon get away from you and out of control. You must work your plan.
Ready for a Credit Card Indicators
With that said, here are the indicators that suggest you’re ready for a credit card. These indicators illustrate whether or not you can handle using a credit card for daily purchases:
- I can payoff the balance now.
At the end of the week or with my current paycheck, you should be able to pay off the balance-the entire balance. A credit card is not a loan.
“Let no debt remain outstanding…” – Romans 13:8 NIV
- I have the money prior to purchasing.
You’re ready for the card if you have the money for the purchases made using the credit card already in your bank. If you don’t have the money, then you need to find other means to obtain the money. Borrowing money should be the last resort; it’s better to go without than to borrow.
- The card is a benefit to me.
Why would anyone want or desire something that wasn’t a benefit, but a detriment? If having a credit card harms you, takes from you, or hinders you, get rid of it. Tools, such as a credit card, should help your life-your business-run better and bring added benefits.
Pamela and I had finally gotten our finances under control. So as a method of process improvement, which you should always look for, we decided to start using our credit card for all of our purchasing and payment needs with the exception of our tithes and offerings. Because I am very meticulous, and you should be too with your money, I make multiple payments a week to clear the balance on our credit card. In fact, last year was the 1st time our credit card ever made money for us. We were able to purchase one of Tamia’s Christmas gifts using the cash back rewards dollars. This wasn’t by accident, it was apart of the plan. That’s why planning is so crucial.
“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” – Proverbs 21:5 NLT
Today is Friday!
This is the final installment regarding credit cards. If you take heed to the tips in the last couple of posts, then you’re ready to use your credit card responsibly. The major takeaway as you know is to have a plan. When you have a plan, you know where you’re heading and how you will get there. What plans do you have for your credit cards? Leave a comment below or click here to email me.