Why Credit Cards are Not Evil

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Evil credit cardsI am going to put it out there and say credit cards are NOT evil!  That is right, I don’t see why there are so many people that think these little plastic cards are so bad.  There was a great article yesterday asking if credit cards are evil and I still say no! Before you start shouting at your computer screen, hear me out.  If you don’t know me, then here is some background on how experience with credit cards.  I used to be in over $50,000 worth of credit card debt.  With that amount of debt, I have a little knowledge on how they work.  This credit card debt also gives me a little credibility when I talk about cards not being evil. I have been there and done that.  I paid off my credit card debt through hard work and determination.  Mix in a lot of side hustling and you got a man who has been credit card debt free for almost two years.  During the four years it took to pay off my cards, I gained a little insight into the world of credit and what I was doing wrong.  It was quite eye opening.

Credit Cards Get All the Blame

Running a personal finance blog, you tend to hear a lot of personal stories. That is really one of the awesome benefits of being a blog owner.  I love hearing about people’s stories.  Some are good and others are bad.  The one thing that I hear time and time again is how credit cards allowed people to get into debt.  Those little plastic cards allowed people to spend beyond their means.  While on the outside, that is completely true.  Credit cards do allow you to spend more than what you have in your bank account.  Since credit cards are not tied to your bank balance, you can just keep spending and spending until you reach your limit.

Along with this theme, I have realized that people are just really placing the blame onto the card and the card issuer.  They are made at the credit card company when they owe them so much money.  They cut up their cards and curse off credit for good.  I don’t have any problem with people not using credit. There is absolutely nothing wrong with that.  Credit should only be used by those that understand how to use it wisely.  The issue is this is not really how it is.  There are so many with credit card debt, amounts into the billions racked up on their cards.  It is a national problem at this point, along the same lines as student loans.

The Blame Lies with You

I hate to be blunt, but this has to be said.  If you have credit card debt, then you can’t blame anyone or anything else, but yourself.  Credit card debt doesn’t just happen.  It is typically accrued over time.  I never once blamed my credit card for allowing me to incur so much debt.  Main reason is such actions are unproductive.  Blaming a credit card for your spending problem is going to get you nowhere.  Let me give you a quick example.

Blaming a credit card for your credit card debt is like blaming a screwdriver when you injure yourself trying to break up ice.  A screwdriver is just a tool that you use.  It has a single purpose dedicated to screws.  There are different types of screwdrivers depending on the need.  If you take a screw driver and decide to use it as an ice pick, then you are responsible for anything that happens.  The screwdriver is not designed to break up ice.  If you then blame the screwdriver for something happening, then you are just deflecting blame.  This is the same thing with a credit card and so many people do it.

Another personal finance issue similar to the misuse of credit cards is how consumers misunderstand the purpose of life insurance. Many insurance experts recommend separating your life insurance and investment needs, meaning never using your life insurance policy as an investment vehicle. Unfortunately, some U.S. consumers still fall prey to agents and brokers touting whole life insurance is a good investment when simple research will explain why whole life insurance is a bad investment for more than 95% of the population. Years later, most whole life insurance policies are cancelled because again, life insurance is a great estate planning tool, but if used inappropriately, can yield bad financial results.

Credit Cards are Not Evil

Yes, a credit card can be used for different things, but they have rules.  You don’t follow those rules, then you face the consequences.  When I hear about people calling credit cards and the companies evil, I just think of this screwdriver analogy. A credit card is just a tool, just like other financial solutions to our disposal. When you use it correctly, then there should be no issue.  When you don’t use it the right way, then that is when things go wrong.  You can’t blame a tool when you don’t know how to use it properly.

Ever since I paid off my last credit card, I actually started using them for every purchase.  I have two go-to credit cards, which are both rewards cards.  I now earn great travel rewards or cash back with ever purchase, but I don’t pay a dime in interest.  I follow the rules and understand that if something happens, then I am to blame.  If I carry a balance, then I spent more than I should have. If I miss a payment, then I didn’t keep up with the bill.  These are both issues that are on my shoulders.

You can argue with the record profits that credit card issuers are getting, but that can all go back to this argument.  They wouldn’t be making billions of dollars if people were not using them incorrectly.  If you use the tool correctly, things tend to go OK.  Of course, credit card companies don’t mind when you don’t pay your bill on time or let balances float, but you are only hurting yourself.  All I ask is that people stop calling credit cards evil.  I have found a great use for them and realize that blame was only with me.

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  1. I almost agree………almost. Yes, credit cards are a tool that can be used correctly, or incorrectly. I don’t blame anyone but myself for racking up credit card debt….BUT some of the actions of these credit card companies are very suspect. Does giving a recent college graduate a credit limit of $32,000 sounds like a good idea? Hmmmm, not to me, but Bank Of America did just that for me. Oh, you’re 6 hours late with your payment this month? No problem, we’ll take your payment but you get a nice $39 late fee plus your interest rate is now 30%. yes, it still all comes down to individual choices and responsibility…..but then again, taking your alcoholic buddy on a night out to all your favorite bars doesn’t seem like a very good idea either.
    Travis @debtchronicles recently posted…Is Investing in Gold A Good Retirement Strategy?My Profile

    • I never said that the credit card companies weren’t suspect. They know their target market. The issue is that it doesn’t matter if they give you $10,000 or $1,000,000. You are still the one responsible for how you use it. They can give you the most money in the world, but it is just a loan. It is your choice to get into a relationship with the card company and your choice to use the card here and there. Though taking your alcoholic friend to a bar is not a good choice, it is the friends decision to drink. You can lead a horse to water, but you can’t make it drink. That is up to the horse.

  2. Ok, I am screaming at my monitor right now, lol! Seriously though, I could not agree more. When I was working my way out of debt I didn’t blame the cards. They didn’t forcibly remove themselves from my wallet to spend the money…I did! It was my own ignorance and lack of contentment/discipline that got me in trouble. Credit cards are like any other tool, financial or otherwise, if you use it for its intended purpose then you’re going to do great and if not then you’re going to end up in trouble at some point.
    John recently posted…How to Pay off Debt: Dealing With The CriticsMy Profile

  3. Society as is moving to a “it’s not my fault” mentality, which is a dangerous thing. I wrote a similar article about a year ago, and i’m glad that others feel the same way! 🙂

  4. While I agree with you, I’m fully aware it’s easy for me to because I’ve never been in credit card debt. However, I don’t blame anyone else for my student loans. I made the decision to go to college and finance it. I did the research and tried my best to make it affordable. I can’t blame my parents, my high school, or my college for not advising me enough. We are responsible for our actions. Thanks for linking to the post!
    E.M. recently posted…Are Credit Cards Evil?My Profile

  5. Thanks for the follow up post Grayson. I saw a link to it on Twitter. I merely asked the question yesterday if they are evil, I don’t really think so personally. it is completely my fault that I used and abused the card and the limit that was given to me. It’s my fault I spent more than I make and I know that. I will say that the companies sure know how to twist things and tempt people though. Great post and lots of great points. I don’t think it was harsh to say that its your own fault if you’re in credit card debt. It’s not harsh to say because it’s true!
    Shoeaholicnomore recently posted…Thing Thursday 5/1/2014My Profile

  6. Amen, Grayson! I couldn’t agree more. Credit cards are NOT evil. They are a tool that can be incredibly useful but also easily abused. We have an unfortunate mindset these days in how we approach credit cards. Most use them as lifestyle extenders. I make XYZ at my job but I have $30K in credit available, so yes I could afford that vacation, gizmo and what not. I appreciate my credit card for the convenience and reward points but I am careful to follow a budget so I don’t spend more than I can afford. Because it is so easy to get into trouble with credit cards, I plan to give the girls one when they enter high school with a small limit so I can work with them on how to use it properly before they head off to college. While I’m sure it won’t prevent them from ever using it when they shouldn’t, I am hoping that they also be better prepared to use it wisely too.
    Shannon @ The Heavy Purse recently posted…How We Told Our Children About Our Debt SituationMy Profile

  7. I don’t think credit cards are evil but credit card companies might be a little…. or a lot! True, you should have control on how you use credit cards so that the credit card companies pay you and not the other way around but they have some shady tactics some times. I also don’t like how they spend all that money peer pressuring people into going into debt.

    I used to give credit card companies a lot of money but now I make them pay me… I’m still losing but I’ll catch up someday.
    Aldo @ MDN recently posted…Retirement Plan OptionsMy Profile

  8. You know Grayson, I’ve got to agree with you here. It really bothers me when people blame a piece of plastic that can’t do anything without human interaction for their problems. Great post man!

  9. Hi Grayson! Great message – I couldn’t agree more. People might also say that some banks are evil, particularly after the GFC, for lending money to those who had no chance of repaying their loans. Although banks usually aren’t as aggressive as credit card companies, people need to take responsibility for their own behaviours and financial situation before signing up for loans they can’t really afford.

    This blame game is pretty common in the stock market too – losing money is often the fault of the broker / portfolio manager / media / company / evil wall street traders / friend who recommended the stock / etc etc…. but not the individual who is making the decisions!
    Jason @ Islands of Investing recently posted…What’s a ‘P/E ratio’, and how can it help me become a better investor? (Part 1)My Profile

  10. Personally I have an fabulous relationship with my credit card. I treat it with respect and in return it earns me free flights to Europe for my family each summer. In my 20s when our cash flow was very tight we occasionally put charges on it that we knew would take a couple of months to pay off. Thank goodness we never let it get more out of control than that. Now a couple of decades later we use it for virtually everything, but the difference is that nothing goes on the card than couldn’t have been paid for in cash – I just use the card to earn the flight mileage. Mentally I treat the credit card like a slow motion debit card. Instead of the cash leaving my bank account while standing in the store like debit, I pay off the week’s charges every Friday so at most any purchase is paid off in about 5 days. As soon as I make any purchase, the amount goes on our spending plan and is deducted off the balance – like an old fashioned check book. As soon as I swipe I consider the money gone. I never pay interest, I earn all the benefits, and as a bonus I never pay a bill late even while on vacation because everything charges to my card so I only have one bill to pay. We lay out our spending a year in advance and the method of moving money doesn’t change the plan – cash, debit or credit the level of spending remains the same, so of course we use credit for virtually everything. Why wouldn’t I take the benefits for doing what I’d be doing by any other method?

  11. When I graduated from college, I had three credit cards at 27.99% interest due to late payments. My dad was supposed to be paying the bills back at home (with my money) and he, well, didn’t. Fortunately I wasn’t in a huge amount of debt, but the interest rates were really disabling, and my credit score was in the toilet. I educated myself, set about paying them off in a year, and haven’t carried a credit card balance since. *I* made the mistake of letting someone else manage my money, and signing up for something that I was ignorant about.

    Yeah, I was ticked off at the credit card companies for a while, but it wasn’t their fault, it was mine. I needed to own it. Now I use a rewards card to manage bills and reap free rewards without paying a cent in interest or finance charges. Sure, the companies often use shady tactics to try to make money, but smart consumers don’t get tricked. Disciplined consumers don’t waste more money with a card than they would with cash. Using cash absolutely does not work for me, I’ve tried.

    • Great article Jen! While it might be easy to think that someone else will take care of the payments, it is essential to make sure things are running smoothly. You have figured it out and are working on making it better.

      You are right about credit card use. I don’t spend more than I would with my debit card or cash. I use my card as just another way to make the payments I normally would.
      Grayson Bell recently posted…Where Did Personal Responsibility Go?My Profile

    • so sad to hear about ur parents mismanagement. so was ur parents, or your dad stealing your money you sent home/set aside for CC payments? i dont understand why you would pay your CCs through ur parents and not pay them like ur college expenses. lot of expenses when going to college, adding a CC bill to that seems do able. just saying.
      joey recently posted…Hannibal Of CarthageMy Profile

  12. The majority of personal finance blogs I come across don’t blame credit card companies at all and put the blame and responsibility squarely on themselves. Your post seems to ignore the fact that predatory lending does exist—especially so with credit cards. Interest rates can often be obscenely high which is unfortunately something we as a society have come to accept as fair since so long as poor suckers sign a contract. But ignorance and naivety shouldn’t mean people get ripped off or have to live in compounding debt for a huge portion of their lives.

    Credit cards are also routinely pushed at those who cannot afford to pay them back on purpose. Why do you think many college campuses are trying to ban credit card companies from get-a-free-hat-and-sign-your-life-away on-campus advertising? And what about financial “products” like payment protection often bundled into these cards that most people don’t even know they’re paying?

    I am all for responsible borrowing, but I’m also all for responsible lending; something credit card companies rarely practice. If we are to look objectively at the massive consumer debtload carried, we’d see that responsibility is shared. And looking further, we’re also realize which side is actually reaping the rewards of this debt. (*hint, it’s not consumers!) It would be nice to see a personal finance blogger take unfair practices to task instead on only focusing on easy targets and individualizing blame.

    • I took the time to respond to your comment via email as your comment was quite detailed. As I pointed out in my email, your not really getting the post. You don’t understand the concept of personal responsibility. No matter what happens in life, you are still responsible for your actions. There are times when things are stacked against you, but you still have to make good decisions. If you are going to blame credit card companies for putting large interest rates on your card, then that is fine. The problem is that you don’t owe them interest if you pay your balance off in full. That is how credit cards work. That information is in full detail all over their terms and conditions. Don’t support people who choose not to read or understand those terms. When you sign the contract, you tell them that you agree with the terms. Debt is still on the debt holder. It is their responsibility to make the right decisions.

      • Like I said in my email, you have no idea what my concept of personal responsibility is and seem to not be able to understand the notion of shared responsibility, since that’s what I’ve been talked about—not “blame the company” like you seem to think I’m implying. Personally, I have very minimal debt that I’ll be paying off within a year, I have thousands of dollars in an emergency fund, I save monthly, I am frugal, I’m educating myself and those around me about smart financial decisions, and talking to my friends who are in debt about being accountable for that debt. I’ve learned from my mistakes. I am all for responsible personal money practices. But it’s not all about you, or me, and our personal situations. Whether or not you like it, you don’t exist in a vacuum. You’re part of a society—one that has systemic and far-reaching issues with financial literacy and one that gets taken advantage of far too often by unfair policies that hurt average families and low income families the most. I can plainly see what an unfair system credit cards often are—even when they’re not hurting me, or if I’m able to exploit them to my benefit. The only reason you’re getting cash back, is because there are many Average Joes out there who aren’t financially literate and who pay far too high a price for their credit card debt. That’s the system you’re exploiting. Just because you’re on the winning side and are using it to your advantage, doesn’t make it a fair system.
        Young&Spent recently posted…Want to travel cheap? Be a WWOOFerMy Profile

        • I assume you also think the food companies are to blame since people are getting fat? Your premise with credit cards is exactly the same. They use predatory marketing and get people to buy their products and then consume them. So you want to push for changes in the food industry as well when really the easiest way to make change is to talk with your money. If you don’t like something, don’t support it. Companies react to their customers’ trends.

    • I don’t know that I can really add anymore than what Grayson already said…or what he said in your emails. I wrote about this on Friday on my site and you’re free to check it out. That said, while issuing banks do certainly share a role in this THE ultimate responsibility lies squarely on us…plain and simple!

      I was one that was lured in on my college campus by the free shirt/water bottle gimmick. That resulted into me getting into $25k in debt and that was 15 years ago. However, while they issued me the cards I and I alone did the spending. They did not force me to spend, they did not pull the card out of my wallet and swipe it for me. I am the one who did it each and every time. Looking back, the ultimate responsibility was on me as I did not inform myself as to how they worked or what would happen if I didn’t pay off the cards each month.

      Aside from that, what concerns me greatly is the belief that we are not to blame for our own individual choices when it comes to finances. Of course we are! While it may feel good to shift blame that will get us absolutely nowhere in life. You say it would be nice to see a PF blogger to take on the unfair practices…I point to the ones who say that we need to take ownership for our actions and get our lives straight. That’s what it should be about and not pointing fingers, as if there is any finger pointing that needs to be happening it needs to be at us for not informing ourselves as to how any kind of financial product works.
      John recently posted…Don’t Blame the Credit Card, Blame YourselfMy Profile

      • It’s unfortunate that you seem to have completely internalized the blame for having been a victim of predatory lending, and that it’s making you blind to this unfair practice that others are still experiencing. Were you partly responsible for racking up the 25K? Sure. Probably even mostly responsible. But also responsible was the multi-trillion dollar company who made a calculated decision to set up free water bottle booths on your college campus. This tactic gives free and easy loans to people without incomes, and with no immediate way of paying back. It is any surprise borrowers treat loans carelessly when they are given out carelessly? Do you know there are people who are fighting practices like this because they see how corrupt they are? On some college campuses these booths are banned, and there are others fighting to have them banned. People like this are financial heroes; they’re people who care about the financial well-being of others and want to protect them from unfair sign-up procedures like what you experienced.

        What I’m talking about isn’t about “shifting blame”. It’s about assessing the entirety of factors, and assigning blame to all parties involved appropriately.
        Young&Spent recently posted…Want to travel cheap? Be a WWOOFerMy Profile

        • At the risk of beating an already dead horse…it is blame shifting! At the end of the day, the card didn’t sprout legs and forcibly remove itself from my wallet – I am the one who did it and I am the one who spent every last dime. Yes, issuing banks play a role and yes we could do a better job about educating society about the wise use of credit. However, the blame falls squarely on us.

          I’d love to be able to do something “wrong” and point fingers at someone else, whether they be an individual or corporate entity, however that would get me nowhere. It’s about accepting responsibility. You’re entirely leaving out the fact that along with those cards that are given out is a set of T & C’s. Are they long? Sure? Can they be difficult to understand for some? Of course. However, they’re given to us and thus is our responsibility to know the ins and outs of them.
          John recently posted…What’s on Your Dollar Bill?My Profile

  13. this person that wrote the article is so full of it. 50k worth of cc debt, payed it all off to 0, and now writes articles relentlessly defending credit cards. 1st of all, no one payes off that much debt in just 4 years, and if you make a living from online writing then it would take 500 yrs to accumulate 50k. and last, after all the hard work of paying off the cc, they decide to write about defending the ethics of the cc. this does not add up.
    joey recently posted…Side Hustling vs. a Part-time JobMy Profile

    • Apparently you don’t read that well Joey. I do not defend credit cards, I just don’t blame them. Yes, I did have over $50k worth of credit card debt. I paid it all off and now I use credit cards for every purchase and earn nice rewards. I don’t pay a dime in interest. I also don’t make a living from writing articles. I have a full time job and write articles on the side. I have not defended the ethics of credit card companies. I just learned what everyone else who use credit cards wisely has learned. You CANNOT blame a company for your problems. They don’t just give you the card. They don’t force you to use it. It is all on the person. Sorry it doesn’t add up, but there are people out there that learn from their mistakes and make a change.

      • grayson i would like to apologize for being a bit rude on my 1st post. your article sounds like you are saying that if only everyone got more CCs and learned how to use them, life would be so much easier. i believe CC companies invest millions consulting to find ways to manipulate people. they are more or less a middle man that is not needed.
        we live in a walmart/shopping mall culture. everyone is “keeping up with the joneses”. we trade up our smart phones for new ones that are no different than our old one that worked perfect to begin with. people are being brainwashed into believing they need things they could easily live happily without. if only they had more money they could get that new “whatever”, but they dont get payed until next week, then they remember the CC in their wallet and buy it. had they not used the CC they most likely would have went home thought rationally (without the new “whatever” in front of them) and realized they didnt need it cause their current “whatever” was working just fine. CCs lead people to impulse buy, spend what they dont have and purchase what they dont need. your CC system sounds legit and i am sure it works well for you, but to 99% of everyone else out there it will fail, they might follow your plan great for a while but eventually they will fall back into the trap of overspending, etc, just like the CC companies planned it. hope this makes sense. from a fellow writer, keep on writing!
        joey recently posted…Hannibal Of CarthageMy Profile

        • Hey Joey,

          No need to apologize. You didn’t think my story was true, but it is. I had to go back and read your comment as I wasn’t sure what you were referring to. Yes, I did rack up $50k in debt (actually much more). I used my credit cards to buy things I didn’t need and I got credit lines I shouldn’t have. The thing is I went out and looked for them. I didn’t get one card from a company that sent it to me in the mail. I was searching for credit.

          I agree with you. We do live in a world where most people want to keep up with the Joneses and trade their smartphones in every day. The problem is still with the person who has the card. I never said you should get more cards and everything will be fine. I said you can’t simply blame a credit card company for lending you money. Yes, they do have ethics that skirt a fine line, but your card doesn’t put itself through the machine at the checkout line. I learned from my mistakes, owned them, and now understand when to use a credit card and when not to.

          I do appreciate you coming back and adding on to your previous comment.


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