Credit Cards Rule

Honestly, this has to stop. Recently, I’ve been reading more and more that “since debt is bad, anyone who uses a credit card must be fiscally irresponsible.” Anytime I hear someone say, “If you were smart, you’d cut up your credit cards,” I shake my head in disgust.  So let me make one thing perfectly clear.

Never take any financial advice from anyone who tells you not to use credit cards.

Why?  Because the financial advantages of using a credit card should be obvious to anyone with even the slightest amount of fiscal sense.  Let me tell you why many people are against credit cards.

Typically, the people who hate credit cards are people who used to have severe credit card debt.  They were young and stupid, and racked up huge credit card bills by buying a bunch of things they  couldn’t afford.  Typically, these people are also mathematically challenged and still can’t competently add or subtract two numbers in adulthood.  A year or two later, they realize that credit card debt has enormous interest rates and that they can’t even afford the monthly minimum payment.  Many of these idiots go bankrupt.  Others buckle down and manage to pay off the debt by changing their idiotic spending habits and acting like responsible adults.

Either way, because of this harrowing experience many of these people resolve to never use credit cards again.  “Credit cards are the devil, they led me down a dark path of debt and poverty!”  They choose to associate credit cards with financial irresponsibility in order to mentally shift the blame onto the “evil” banks, when in reality the only one to blame was themselves.

Credit cards are not the problem. Irresponsible credit card use is the problem. Iff used responsibly credit cards are amazing financial assets! The problem with credit cards is intrinsically the same as the one plaguing guns. They’re only dangerous in the hands of a moron. Of course, the world is full of morons.
Let’s break down the standard credit card. Unforgivably high interest rate, exorbitant late fees, fraud protection, cash back or rewards points, the ability to get reimbursed for items that merchants won’t accept returns for, extended warranties, sometimes even roadside assistance…wait a second. Most of those things sound great!

Let’s break it down:

Benefits Drawbacks
Convenience High interest rates
Reward Points High late fees
Cash Back
Fraud Protection
Purchase Protection
Refund Protection
Extended Warranties
Roadside Assistance

Wow!  It looks credit card use has way more benefits than drawbacks!  Well here’s the big secret about credit cards.

They have zero downsides if you don’t carry a balance.

Don’t carry a balance, and you’ll never have anything but love for your credit cards.  I guarantee it.

So instead of avoiding credit cards, the intelligent thing to do is to make sure that you learn how to use them responsibly. First of all, never treat credit cards as “free money.” That’s the biggest mistake that people often make with credit cards, because it entices them to max out their credit cards on things that they cannot afford. After all, what’s a fifty dollar monthly payment when you can have a bitching new iPhone right? But don’t become one of those people.  Those people are morons and are marching down the road towards bankruptcy.

Start training yourself to understand that your credit card and your debit card are essentially identical, and you’ll learn to avoid unnecessary purchases. Second of all, set up automatic bill pay. It’s one of the greatest features that any financial institution can offer. Essentially, you’re automating responsibility. By setting up automatic bill pay to pay in full every month, you’re forcing yourself to never carry a balance. You’re also guaranteeing that you’ll never be struck with unsavory late fees or criminal interest rates. Follow these two simple steps, and you effectively immunize yourself against the only real downsides of credit cards.

Now, you know how much I love scenarios, so let’s have a little fun and break this down in a way that better illustrates why credit cards usually trump cash.  We’ll compare someone who only pays with cash to someone who only pays with a credit card. Let’s assume the credit card in question is a fairly basic credit card, with 1% cash back and standard protections. We’ll call the cash user Mike, and the card user Steve.

Scenario 1
Let’s take into consideration the most basic scenario of simply purchasing something. Every time Mike spends a hundred dollars, he’s throwing a dollar in the trash. It’s that simple. There’s no possible way to justify that. That’s a 1% guaranteed return that you’re literally throwing away. For many credit cards, it’s 5% on specific purchases like gas, travel, or groceries. If you’re spending thousands of dollars in gas a year, getting 5% of that back is a significant sum of money.

Instead of throwing it in the trash, why not toss it into your retirement funds or your student loans?  Right from the start, using cash instead of a credit card is retarded.

Steve (Credit Cards) Mike (Cash)
Saved 1-5% on every purchase Saved nothing

Scenario 2
Now, let’s consider a different scenario. Radioshack has an amazing deal on a brand new hundred inch flat-screen TV for only two hundred dollars. Mike and Steve jump on the offer, and are able to nab one before they’re out of stock. Unfortunately, the TV turns out to be a complete piece of crap.  In fact, Radioshack put a disclaimer sticker on all these TVs stating that “This item is non-refundable because it’s a complete piece of garbage.”  Being far too manly to read instructions, both Mike and Steve fail to notice these warnings. Upset, both Mike and Steve return to the Radioshack and demand a refund. Both of them are politely informed by Radioshack that they should learn how to fucking read and to fuck off.
Sounds like they’re out of luck right? Well, Mike certainly is, but Steve has another option. Thankfully, Steve used a credit card to make his purchase. After being rejected by Radioshack, he gives his credit card provider a call and describes what happened. The friendly customer service representative informs him that his card comes with a 90 day return protection policy, which covers returns not accepted by the retailer. After filing a claim, Steve gets his two hundred dollars reimbursed two weeks later and uses it to win a million dollars in Atlantic City. In contrast, Mike dies of blood loss after punching his worthless TV in a fit of rage and being lacerated by a million pieces of sharp glass.

Steve (Credit Cards) Mike (Cash)
Got a full refund through his credit card provider Died of blood loss

Scenario 3
Now, let’s consider one final scenario. Mike and Steve are both having the time of their lives in Las Vegas. They’ve set aside five thousand dollars each to indulge in whatever unsavory debaucheries they desire, and they’re determined to use all of it. Unfortunately, they are both mugged by crazed crack fiends and their vacations are ruined. Or perhaps not? While both of them were mugged, Steve wasn’t carrying any cash on him. Steve hates carrying cash, and pays exclusively with a credit card. So, Steve gives his credit card company a call and inquires about his account. Unsurprisingly, the crack fiend rang up a $5000 bill. However, Steve isn’t liable for any fraudulent purchases, and is able to continue his vacation unabated after his friendly credit card company overnights him a new credit card! Mike on the other hand, was carrying five thousand dollars in cash. The crack fiend is stunned, because he can’t believe that anyone would be stupid enough to walk around drunk in a dark alley with that much cash on him. Out of pity, the crack fiend stabs Mike to death because he feels obligated to put somebody that idiotic out of his misery. End result? Steve is getting drunk in a hot tub with four scantily clad women and Mike is dead.

Steve (Credit Cards) Mike (Cash)
Suffered a minor inconvenience and had a fantastic vacation Stabbed to death by crack fiend

So, I hope you’ve all learned a valuable lesson from the adventures of our imaginary friends Mike and Steve. Credit cards offer a wide array of benefits and protections that every financially responsible person should take advantage of. So don’t ever let anyone tell you that credit card use is irresponsible.  It’s only irresponsible in the hands of an idiot.

Add a Comment

Your email address will not be published. Required fields are marked *