Does it Make Sense to Use Credit Cards?

Is it any wonder that credit card companies target college students, many who are on their own for the first time in their lives? Also, why is it that low-income people are the ones who receive numerous offers for credit cards every day? The truth is that credit cards are not inherently evil, as many would argue. Sure, the companies have little oversight and are not in the habit of fact-checking the people who are applying for cards. They are structured to give people every chance to fail, and the sad fact is that most people will eventually.

Credit cards make sense to use if you know and understand how to use them correctly. Americans abuse credit cards, mistaking them for "free money" and opening many different cards at the same time to satisfy their thirst for expensive things and, ironically, things they can't afford. For many people, once they open a credit card, they will never pay off the balance completely because they only pay the minimum due. This is exactly what the credit card companies are banking on. People who pay the minimum due will always have a balance, which means more money made in interest and penalties in the long term.

It is not terrible to have a credit card for emergency purposes only. Unfortunately, if you carry that card around with you and you rationalize buying something you can't afford once, it's sure to happen again, and again, and again. Studies show that the longer a person has a credit card, the more likely they are to begin abusing them after a while. Having a credit card and using it appropriately means that you have diligent habits when it comes to paying your card off.

The problem is the culture that surrounds us. We have forgotten what it means to save-up for something that we really want; we used to understand it when we were kids. How many times did mom and dad say something like, "If you really want that bike, you'll have to work hard around the house and save up your allowance to buy it." As kids, we understood that, although it wouldn't be any fun, if we wanted that bike, we would have to work for it. The same is true as adults, but many people have forgotten the virtue of having to save for something they really want. Citizens in the United States have the lowest rate of savings when compared to all other civilized, first-world countries. What's the problem here?

So, how does one go about using a credit card correctly? LIVE WITHIN YOUR MEANS. Don't rack up a large balance on your credit card. If you charge something, pay it off by the end of the month. Don't let the credit companies get rich off of your interest payments any more. For emergency purposes take a little money out of every paycheck and put it into a savings account. Yes, for emergency purposes, we should not fall back on our credit cards anymore. Be smart. Don't spend money you don't have.