Credit Cards: Rule or Be Ruled

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Question: How many of you need more money?

I think we can all say we need more money. I don’t care if you have no debt, all your bills are paid for the next year, and you have a nice, fluffy savings account. You’d be doubted by most if you said you don’t need more money. However, if you think you can truly answer no to that one, how many of you want more money? Now there’s a different story. It no longer becomes about having enough money but getting creative with what you could do with more money.

This is something I’m passionate about! I can’t wait for you to read along and hopefully be helped.

First, a little background story. My husband Aaron and I are both in our mid-twenties. We have been married just over two years, we have a 10 month old daughter, and our only debt is the mortgage on our home. I am a stay at home mom (I haven’t worked in over a year and a half), so we only have one income. We own two cars, we have a cat… I think that about covers the mouths we have to feed and the larger assets we own.

I say all that so that you know we’re not working multiple jobs between us or doing something unrealistic that you yourself could not adopt. We have bills and they’re always paid on time. We’re not stingy people (in fact, we give away about as much as we spend on ourselves) and we’re not working the system to get handouts in any regard.

I’ll also include that we are not financial advisors. Anything you read here is simply our personal testimony of what has worked for us and should not be taken as professional financial advice. Speak with whomever your trust with your money before making life changing financial decisions.

But hey, if you find this works for you too, give us some credit and pass this on!

I won’t go into detail at this moment on how we’re working on getting out of debt or what has brought us to where we are financially today (because that’s many different posts that cannot be summed up into one). I want to focus on one financial aspect that has been a huge help to us. As you can see from the title, we’re talking credit cards here.

Aaron and I both have the Chase Freedom credit card. We each got our own before we were married and we have enjoyed using them since day one. If you want to know more about why we love them so much, read How I Get Paid to Spend My Own Money.

I’ve always had a credit card growing up (well, had my name on a credit card that my parents were linked to), but I was taught that it was only for emergencies. My parents never wanted me in a situation where I couldn’t pay for something that I absolutely had to at that moment (for example, gas to get home). I appreciate that my parents viewed credit cards this way. I actually still have a credit card that belongs to my dad with my name on it that I never touch. I may be married with a kid but he’s still being a dad! Pretty funny. I’ll likely do the same thing with my daughter.

Now, Aaron and I don’t use our credit cards for emergencies. It’s actually the exact opposite. We use them for every single thing we can. If we’re spending money and we can use our Chase Freedom, we do!

If you’re paying attention you may be thinking, “but I thought you said you have no debt except your mortgage.” That’s right! We don’t! Keep reading to see how we use our credit cards all the time, yet they do not rule our lives, nor do they accumulate debt. In fact, they’re making us money!

Think right about money

First things first. If you don’t think right about money, you probably cannot handle a credit card. What is thinking right about money? Well let’s define money as it relates to how it affects our lives, not by Webster’s definition. Money, most simply put, is a tool. I love what my pastor says, “You don’t use people to get money. You use money to bless people.” Money can be a such a blessing, but it can also be the fuel behind a destructive force when it falls into the wrong hands or is being viewed incorrectly. Notice I didn’t say money was the destructive force. Money only fuels whatever we’re applying it to. If you apply money to a charity, you’re fueling their vision. If you apply money to an addict, you’re fueling their addiction.

So if we’re going to think right about money, we should remember it’s a tool. It’s a tool that can help us accomplish projects. Your project may be getting out of debt. Your project could be giving a gift. Your project might be cooking a meal tonight. Whatever the project is, if money is required, then money is the tool to help you get that project done. Start being mindful as you spend, save, invest, or give, that you are using the tool of money to fuel a motive to accomplish a project!

Think right about debt

Now that we’re thinking right about money, let’s start thinking right about debt. Debt is not bad, and it’s not wrong. As it relates to the lender, it’s just another way someone is using the tool of money to fuel their motive. The goal behind debt is to use money to make more money. As it relates to the debtor, the goal is to use the tool of money (someone else’s money) in order to obtain immediate financial liberty to accomplish a project. Both are completely justifiable! I’m not here to judge anyone with debt, because I have it too. But I do believe there is a right kind of debt and a wrong kind of debt.

The right kind of debt would be determined after you’ve answered yes to all the following questions as it relates to what you’re wanting to put on credit:

  • Is this a need?
  • Do I need it now?
  • Is this the only option (meaning there is not a more affordable option after shopping around or the option to borrow/rent)?

Then proceed! If you need it and you need it now, there’s no sense in beating yourself up over getting into debt. (I can’t help you if you don’t think rationally about what is a need and what is not. Be real with yourself here.)

The wrong kind of debt would be identified when you spend frivolously without asking yourself the above questions simply because you want something. This is what gets people into trouble with credit cards. Wrong debt is also the debt that you don’t mind having. I’m not saying debt should stress you out or give you anxiety. On the contrary, debt should not rule you, and if you’re thinking right about it, it won’t.

Debt is binding. Debt has a very bad reputation because everyone knows that it means you owe someone. You’re financially bound and obligated to them until you have paid the debt off.

The right kind of debt is debt that you’re diligently working to pay off. The wrong kind of debt is the debt that only grows each month with no plan of escape.

An example of the right kind of debt would be our home. We lived in an apartment for our first year of marriage, but when the time came to renew our lease, we knew it was a wise financial decision to get into debt (we had none before we bought our home) and begin making payments on a home. The reason is pretty obvious. We were paying over $1100 to live in an apartment we would never own. Now we’re paying off the debt on our home to one day own it, and we’re paying less than we were on our apartment!

Budget every single dollar you receive

This. Is. Huge. If you’re not budgeting your income to the last penny, how will you even know whether or not you can afford something or you need to put it on credit!? I don’t get people who don’t budget at all. My husband wasn’t budgeting before we got married (we were dating) and I told him he needed to start because that was a “deal breaker.” You know, something you can’t live with and is worth calling the relationship off for. Yeah, it’s that serious. Don’t worry, now he’s much better at budgeting than I am! But I wasn’t willing to allow the tool of money to be an issue in our marriage.

Side note: I hope to write a post on how we budget soon! I don’t want to just slap it on a page though, so it may take some time. I’m talking screen shots and everything so that we can help people who don’t know where to start!

View your credit card the right way

The way we look at our credit cards is as if they were our debit cards. We pay them off in full every month and we only spend what we have budgeted for (of course this is not including emergencies). We use them like cash in hand, and if we don’t have it, we don’t swipe it! It’s that simple. I’m confident the only reason we’re able to do this is because we have the other three points down. We think right about money, we think right about debt, and we budget so we know how much we can spend in every regard. We’re not perfect, but we’ve come a long way, and as I mentioned before, we’re doing this all on one income, with a baby, and a cat! Ok, so the cat doesn’t cost that much… The point is, we’ve proven it out and we have not once had to use our credit cards as “credit cards.”

Why, then, do we have credit cards you might ask? Go read How I Get Paid to Spend My Own Money. I talk all about it!

Before you get a credit card make sure you’re thinking right about money, thinking right about debt, budgeting, and getting the credit card for the right reasons. Don’t look to a credit card as a way to get something you really want and also really don’t want to take the time to save for. Don’t use it as a way of escape from bills that are collecting. A credit card is not to be used for instant gratification. That’s the recipe for financial destruction in the long run. Credit cards are awesome in so many ways, but they are also such a financial hinderance to people who are handling them incorrectly. I love a good “how we tackled $30k of credit card debt” story, but I’d rather tell my “how I’ve only made money from my credit card” story. Not a single cent has been spent on interest and I love it!

Also, do your research. I knew I wanted the Chase Freedom credit card from day one because of what it offered and it didn’t have any commitments I couldn’t fulfill. Don’t sign up for a card you’re not certain you can handle like cash. That’s what you want to pretend it is anyway.

And shhh…this isn’t how banks want you to use their credit card, but we’re not doing anything wrong by paying them on time and in full! In fact, my bank keeps upping my credit limit, hoping I’ll some day spend more than I can pay off that month and they’ll collect something from me. Sorry, guys.

I really hope this helped you! Pass it on to someone thinking about getting a credit card or someone who may be struggling with credit cards. It’s never too late to take control of your finances and move in the right direction.

Thanks for reading and here’s to enjoying the tool that is money!

Connect with me on Instagram @darlinglittlelessons

Deuteronomy 8:18

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