A Single Action Colt 45 or a Visa Platinum Card?

We have had one credit card for 25 years. I put off getting a credit card until I was 35 years old. Even in my twenties, I saw a number of my peers get themselves into serious trouble with plastic money. However, at that point in my life, not having a credit card was getting pretty ridiculous and quite inconvenient. Fortunately, I had a father. This is a man who taught me how not to blow my fingers off with firecrackers, the safe handling of loaded weapons, and a healthy fear of debt. I have paid off my credit card every month for over 25 years. Perfect record. Never carried a balance, ever. It can be done.

I treat my credit card very much like a loaded handgun. It does not go off unless I have chambered a round, checked the safety, made certain the range is clear, and taken careful aim at what I intend to hit.

In a recent article from U.S. News and World Report entitled Ten Worst Credit Card mistakes, the author examines some astonishingly bad practices. The most outrageous mistake listed was giving your credit card information to someone else or giving signature authority to someone other than your wife or husband. This is called inviting identity theft into your life. I found it shocking that anyone could be that naive or careless. Then some parents have been known to leave loaded guns lying around a house full of unsupervised children. The author suggested one exception, parents giving a responsible teenager a credit card for limited use under strict supervision. I can add another. Power of Attorney granted to an adult child by an elderly incapacitated parent. It happens.

Number 3 from my list of 10 Basic Rules for Young Couples states, “Don’t use a Credit Card unless you can pay it off every month.” The article warns about spending more on your credit card than you have in the bank. Credit Card debt is particularly toxic because the interest rates are so high. I am really hard core on this issue. If you can’t pay that card off every month, lock it up in safe or a safety deposit box until your monthly balance is zero. As part of Dave Ramsey’s Financial Peace University he encourages the participants to cut up their credit cards and collect the remains in a large glass jar.

I expect the most common mistake is improper or inadequate management of statements and payments. The credit card companies do a remarkably good job of accurately charging your account when you use their card. However, every month sit down with your credit card accounts. Go through the charges, line by line, matching the listed charges with your receipts. If you see a charge you do not recognize, ask. Start the investigation with your spouse. If that does not produce an answer, call the company that is listing the charge. It doesn’t seem like it should be necessary to tell an adult to do an item by item check of their credit card statement, but there are functioning adults who have never balanced a check book.

Another recommendation: never use a credit card in an ATM. With most credit cards the bank will charge a flat fee for use of their machine. In addition, the credit card does not wait until the end of the billing cycle to start interest payments. You will begin paying interest immediately. I have not had a bank account in over 25 years. Instead, I have been a member of my workplace credit union. This is not only cheaper and safer than dealing with a bank, but extremely convenient. I have never found it necessary to use an ATM. However, our Credit Union does provide us with the ability to use ATM networks if the need should ever arise.

If you do find yourself with credit card debt always attempt to negotiate a better rate. This is particularly effective if you actually have a better offer. Credit cards are such lucrative profit centers, the bank has room to be flexible and still make an obscene amount of money. “When the going gets tough, the tough change the rules.”

Oh, one more thing. Don’t sign up for a credit card just to get that really cool hat or similar trinket. Unfortunately, that happens every day.

The author sighs in disbelief, “People please let’s be careful out there.”