Stop Treating Your Credit Card Payment Like a Bill!


In casual conversations, I’ve heard people say things like, “I can’t afford to send my kids to karate because I have to pay my rent, electric, phone and credit card bill.”


Once, a friend, who earns a high salary but was going through a tough financial time, told me all about her new $2,500 Louis Vuitton handbag. “Oh,” she shrugged. “I just put it on my credit card.”

Okay, what?!

These statements are muttered with such nonchalance as to suggest that consumer debt is a basic necessity, like bread or warm bath water for your newborn. But here’s a reality check: Credit card debt is rarely—if ever—a necessity. It’s a luxury at best, and a personal finance landmine and economic disaster at worst.

For starters, mass consumer debt is bad for the economy. Remember the financial crisis of 2008? Blame the corrupt, grubby banks all you want. Individual greed and a lack of financial responsibility also played a major role. After all, while lenders extended overly generous mortgages to borrowers, home buyers knowingly took them on.

During the ramp up to the downfall, credit card debt was also growing. We forget that living beyond our means eventually catches up to us.

Credit card debt is just as dangerous for individuals—and I’ve heard all the excuses. Even if you can afford the monthly payments, aren’t adding to the balance, or have a 0-percent interest limited offer, you still have that monkey on your back drawing energy away from building wealth. You’re constantly working to pay off past experiences and purchases, rather than confidently moving forward. You’re constantly looking back–at purchases you made months, even years ago, and financial decisions you may now regret.

Yet, we are a nation comfortable with debt. In 2015, the average American family with a revolving card balance owed $16,140—up 3.38 percent from 2014. That’s not much lower than $18,623, the 2009 high point. So it’s hardly surprising that nearly a fifth of people surveyed by the National Foundation for Credit Counseling say that carrying debt is a responsible way to manage their finances.

Sure, wages have been stagnant, food and housing prices are up, and employment trends are unstable—but Americans are also spending more on clothes, electronics, and restaurants. No matter how you slice it, the fact is, many Americans rely on credit card debt.

That messes with the way we think. It says: Enjoy now; you deserve it! This is an investment in your self-care; you’ll earn more later! Everyone carries debt; what’s the big deal?

These messages are particularly poignant at the beginning of the year, when people nurse their holiday hangovers. In December 2015, revolving consumer debt in the U.S. increased 7.5 percent, so it’s possible you ushered in 2016 with a little more financial baggage than you’d like.

But regardless of the season or the reason—a fabulous Presidents Day sale, the desire for a new spring wardrobe or a summer vacation—there will always be a justification to spend.

That is, until you realize that you have to power to get off the ride. Because while you might not be able to control the cost of electricity or eggs, you can control how much you shell out for clothes, electronics and restaurant meals—and how much you put on your credit card.

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