My suggestion is that if you can get cash back or other benefits you’ll use, it isn’t a bad thing to use the card for the initial purchase. But see what the trade off for doing so is. If there is an annual fee, the cost of that fee may be greater than benefits you’ll receive. But there are quite a few with no cost that have cash back or miles accruals, and those can be used wisely. 

I just read an article that said American’s fear maxing out credit cards due to a large purchase, yet many still max out their credit cards. I have often shared my thoughts regarding credit card debt with those who ask my opinion on whether they should use credit cards for items they need (or want). 

The issue is when you use the card to make purchases you can’t afford to pay off right away. I don’t suggest this be done unless it’s an emergency (and very few things actually qualify as something that can’t wait). The interest (and late fees due to failing to make a timely payment) can add up quickly and make the cost of the item much more that the original purchase price. 

I suggest to cut back on spending anywhere you can to start building up a savings in an easy to access account. No less than 6 months is recommended. No one expects emergencies to arise, and being prepared with cash on hand is a good thing.  

Many are in a very tight spot at the moment because they didn’t anticipate a government shutdown and didn’t have savings to help them make it through the weeks without pay. I’ve heard people say they couldn’t pay their mortgage and monthly expenses. And while the shutdown and it’s impact was a terrible thing for those affected, many of the problems could have been avoided with a savings plan. 

So if you don’t already have money put away to cover your expenses for at least 3-6 months, please start now. You may think you don’t have extra cash to do so, but take a hard look at your spending. Do you buy fancy Starbucks coffees, or pay for a cable package you don’t really need? What about your cell phone plan or eating out? Honestly look at your spending and see where you can cut back. Put that money you save away where you won’t easily spend it, but can get it when needed for an emergency. 

I think you’ll find it isn’t as hard as you think to save some money, and you’ll be glad you did if/when something unexpected strikes. 

If you’d like to read the article to which I referred in the introduction, it can be found here.

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