Maybe I’m crazy, maybe this is a stupid question and definitely too stupid to have an entire blog post dedicated to it, but seriously, what is the point of credit cards?
I do have a credit card. For about 7 months I have been using it off and on interchangeably with my debit card. Each month, I pay off my full balance and I never spend more money than I have. It seems pretty sensible considering an interest rate of about 22%. The reason why I got a credit card to begin with is because I wanted to start building some credit history in case I ever needed a loan for something like a house or a business startup. But besides that one single reason, why play the credit card game at all?
The stories are everywhere, people suddenly finding themselves multi-thousand dollar credit card debt with no end in sight. It’s the kind of story that parents tell their sons and daughters before letting them get their first credit card, but isn’t it exactly what the credit card companies want? Think about paying 20% interest on $100. In one month you owe $120 and in 4 months you owe $207.36, that’s more than double! Now imagine if you have a huge credit card debt and can only afford the minimum payments.
It’s hard for me to find any real benefits to having a credit card. If you’re like me and only spend money you already have, then why use it at all? If you use it to borrow money, what is so important that it can’t wait until you’ve saved up for it?
The credit card I have is not accepted overseas so I think I will cancel it before I go abroad. I don’t know if I’ll get a new card. After all, I probably should built up some credit. It just all feels like a silly old fashioned game that I still have to play because that’s what everyone else is playing. But what if they weren’t?
