Updated Feb. 7, 2024

Credit cards are necessary but potentially dangerous.

When I was much younger—in my twenties and thirties—having a credit card was a big deal…at least for me. More than anything, credit cards meant status: you were a real somebody if you had a fistful, and I didn’t have even one.

Back in those days, qualifying for a coveted credit card was much tougher than today. I tried to qualify for one or two several times but was denied, probably because I never had one before and my income was not sufficient to meet the bank’s standards. Also, I hated being forced to tell anybody—especially strangers at banks or credit card companies—how much money I earned or had just to get a card.

Funny how things change. I have all the credit cards I want or need and always throw away any advertisements mailed to me informing me I “qualify” for yet another one. Like so much of life, when you no longer need or desire something is the precise time you can finally have it.

Basically, the only card I use is my Discover card, one I’ve had for years. I have one or two others I rarely, if ever use, and I couldn’t tell you right off the top of my head which ones those might be.

We all have our quirks and idiosyncrasies, and one of mine is I despise paying banks and credit card companies one single penny in fees or interest. I’ve had my Discover card for, I believe, over twenty years, and I can recall maybe paying interest on the charges except for once or twice. And this was because I forgot to make a payment, which occasionally happens.

I never carry a balance on my credit cards longer than the usual grace period of one month. Each and every month I pay off the balance in full because, as noted above, I abhor the thought of giving my hard earned money to a credit card company because of interest. To me, the concept is obscene and I won’t do it.

“We all have our quirks and idiosyncrasies, and one of mine is I despise paying banks and credit card companies one single penny in fees or interest…”

Roy Spears

And I’ve been this way my entire life and don’t plan on changing this philosophy anytime soon.

Why do I think this way? For one reason, I believe the interest rates charged by credit card companies and banks to be usurious and ridiculous. Who would agree to be robbed this way, month after month, year after year? It’s insane.

It’s astounding—and foolish— how many people carry huge sums of credit card debt, paying exorbitant interest rates every month—hundreds and hundreds of dollars just in interest payments alone. Who can possibly get financially ahead doing this? Most people can’t, and this is one reason many Americans are broke.

(Update February 7, 2024: Interestingly, Youtube’s algorithm suggested this video by legendary financial guru Warren Buffet where he discusses credit card debt. [Begin at timestamp 7:15]. Buffet has excellent advice:)

Looking back, I’m glad my applications for credit cards were denied in my younger days. I was forced to live within my humble means and only purchased items I could afford. If I had been issued credit cards, would I have been tempted to max them out, live beyond my means, and become hopelessly trapped in the credit card, self inflicted prison system? Possibly. I might be a slave today to the banks and credit card companies, helplessly drowning in debt and never having the hope—or financial power—of crawling free from underneath that system.

For young people starting out in life, adopting my philosophy toward credit card debt is a wise one. I would even recommend not having any credit cards, but this seems to be an impossibility in today’s world where we have to have credit cards to do most anything: purchasing airline tickets, shopping online, etc.

There are, I’m assuming, still debit cards where you have to have an account with money in it which is then tied to your credit card: how much money is in that account then determines how much “credit” you are then able to qualify for. I find this to be a difficult but better arrangement than what a true credit card is all about because you are forced to once again live within your means—or how much money you have in that account.

Then, as you learn budgeting and the proper use of credit card debt (paying the balance off each and every month so you never have to pay interest, fees or overdrafts), you can transition to a credit card once you qualify and your credit is established.

If you read my first post on money and investment tips, you might recall the helpful phrase I used: it’s the little foxes that spoil the vines. This is one wise saying and, like so many other great maxims, has many potential meanings and applications. For credit card debt, it teaches carrying such debt is one of those “leaks” in our finances which can prevent us from becoming financially healthy and threatens to sink our boats.

So be wise. Recognize and understand both the benefits and dangers of having and using credit cards. And especially if you are just starting off in life on your own, make it a rule you will never buy anything with a credit card unless you can pay it off before being charged interest.