Gas on Your Credit Card: Is it an Economic Death Spiral?
Fiscal Fitness Phx2019-05-15T14:05:35-07:00
I hear this statement far too often:
- “I only use my credit card for food and gas. I figure I’m going to buy that stuff anyway, so it’s no big deal if it goes on a credit card.”
What’s wrong with using your credit card for everyday expenses?
In the majority of cases, using credit cards allows you to stop paying attention to your finances. It allows you to get lax and maybe only think about those small expenditures once a month when your credit card bill comes due. And a lot of times what we’re spending and what we’ve actually spent are two different numbers.
Managing your money, watching what you’re spending, and sticking to a budget are exercises that must happen regularly regardless of your income. If you’re only tracking those expenses once a month, it becomes easy to spend more than you think you are or to tell yourself it’s ok if you leave a little balance this money. You can pay off the rest off next month.
And that, my friends, can be a very slippery slope.
Most People Aren’t Honest About Their Credit Card Debt
Did you know that 80% of people lie about the amount of credit card debt they have? So out of five people, four of them may not be telling you the truth about their money habits.
For the record, I don’t think it’s because we’re all a bunch of liars. I think it’s more so because saying “I use credit cards to manage my money” does not leave us feeling proud. We want to feel like we’re in control of our finances, and relying on credit cards for little, everyday purchases here and there doesn’t leave us feeling in control.
Have You Been Putting Everyday Expenses on Your Credit Card? I Have a Challenge For You
My challenge to you: Use only your debit card or cash on everyday purchases for the next 30 days.
I want you to stop using your credit card for things like gas or food. At first, it may seem inconvenient to go to cash or a debit card. But that’s the point. It’s going to force you to think more frequently about the cash you have on hand in your checking account as opposed to your credit limit. You will have to pay closer attention to how much you’re spending on a day-to-day basis. And that’s a good thing. I want you to be forced to think about these purchases before you make them. And the great thing is, this challenge may even end up saving you money.