I came across an interesting post over at Growing Up, which made me think of my own trap with credit cards.  Here’s the interesting part of the post for your perusal:

True, the immediate cash back reward meant I spent less on every purchase. But too quickly did both my husband and I sink into the “we can put this on the card and worry about paying for it later” mentality. Thankfully, we didn’t do this with any major purchases, but we ran up a ridiculous food bill over the last couple of weeks, giving in way too much to temptation and relying on credit to sate our food cravings. Apart from the financial consequences, it wasn’t all that great for our waistlines, either.

So, determined not to carry a balance on yet another card, I paid it all off, which didn’t leave us much money for extras this half of the month, or for debt reduction. It also meant I had to dip into our savings to pay some surprise medical bills from June that weren’t covered by my deductible. Grumble grumble. It’s not the end of the world–again, I’m just thankful that we even have a savings account to take care of this stuff–but it’s not very encouraging, either, and I’m irritated with us both for being so lax and wasteful.

No more Paypal rewards. Clearly, we’re unable to resist the temptation to use credit, and the cash back is hardly worth it if we end up spending more than we would otherwise.

You see, even personal finance bloggers have trouble dealing with credit cards.  Buy now pay later, as advertised by the credit card companies can really set you back because you are betting on a greater future income.

“Betting on future income?”

In the example above, even with a cashback card, if the balance isn’t paid in full at the end of the month, the card company makes back the cash reward in interest down the road, negating any cashback “savings” you have earned.  I’m not sure what the specifics are on her plan, but I’ve interacted with too many people who’ve drowned themselves with a cashback card talking about how much money they had “saved” the whole way.  If you can’t afford it now, putting it on a credit card says, “I will be making enough money to afford it next month, year, decade, etc.”

Eliminating Credit Card debt is hard too, because they’re always encouraging you to spend, not requiring high minimum payments, but charging an almost usurious rate.  If you aren’t in a big bind right now, I would ask you to consider paying off your cards, for your family’s sake.

Here’s what I did when we were first newlyweds and had all kinds of fun credit card debt.

  1. Figured out the minimum payments for all the different cards, they added up to $250 a month.
  2. Figured out the minimum payment on an unsecured loan to pay them off in full in 2 years, it was $170
  3. I took the loan and paid all the debts off in full then I cut up all the cards except one card for emergencies and that got put out of sight.  I kept the accounts open in case of a big emergency, but also to maintain credit history, but since those cards are in tiny bits, I don’t have to worry about spending on them.

 What experiences have you had with credit cards?