Wednesday, January 29, 2014

I'm a Credit Card Hypocrite

Credit Card Hypocrite

The other day my wife and I were shopping for a new laptop, she changed jobs and were without a computer for the house, unless you include "my computer" which my wife purchased around 2006, it has no battery so it must be plugged in at all times, cannot download pretty much anything because of a certain error message about running a program that from a drive, and heavens forbid you X out of something, it could be another 15 minutes before you are able to get back on, and did I mention you also cannot restart the computer or shut it off without unplugging it.  Oh yeah it's a Peach!  But I digress........ 

We did our research on computers before hand and had maximum budget before taxes, she knew pretty much what she wanted between 1 or 2 computers, it really came down to the size of the screen, which was a difference of $200.  Because my wife and I keep our separate accounts and one joint account for items we equally contribute for ie mortgage, food, utilities, etc  this purchase was all her, I can deal with the Peach listed above.  I like any loving husband gave my wife advice on the purchase as we were doing the research together.  I said and I quote "I would put the purchase on a credit card you might as well get the miles/cash bonus for a purchase you plan to make anyway"  HYPOCRITE!  Now I haven't used a credit card for I believe about 2 years ago to make a large purchase of Airline tickets.  I am credit card debt free and I have been the anti-credit card guy since then.  So why am I giving advice to use a credit card? 

It all starts with what I can control and what I cannot control.  My wife is smarter than I am and I can't make her not use a credit card, I can do my best to influence her and provide her as much information on why you shouldn't use a credit card.  Dave Ramsey for example mentions a study that says credit card use at McDonald's found that people spend 47% more when using credit cards instead of cash (  Now I believe the difference is we are not making a random purchase, this is a planned purchase with an expected amount that we have in cash available for this purchase.  So my turning point would be I believe if you are making a large planned purchase, cash available in your checking account, it is not against the rules(Finance and Fitness Dreams Rules).  If you are able to get an extra $10(1% of $1000) for this purchase.  This makes the assumptions that you will pay the bill in full and on time, which definitely factors into the decision.  There is many factors that need to be considered, but as I have mentioned previously I am not going to use a credit card to make purchases, now or in the future, I have loan debt to pay off and I do not feel comfortable putting any amount of money on my own personal credit card. 

My advice for my wife is slowly progressing to putting ALL purchases on the debit/checking, but like any habit, one of the hardest things to do is stop doing it "cold turkey" so we are working on a process of gradual reduction.  My wife has been in the habit of grabbing whatever card is in her wallet, debit or credit and making a purchase.  We have slowly progressed to using 1 credit card only to make purchases, then using that 1 credit card to make only business expenses.  She has since changed jobs and no longer needs to make purchases on the credit card for business expenses.  After January 2014 is over in theory there should be zero purchases on the credit card and only debit purchases.  Because we tend to travel a credit card purchase will be in the mix in the form of airline tickets, car rental, hotel, etc and I think it is in our best interest.  I will pay cash directly to my wife when these purchases are made.  It's not a credit card free life, but it is certainly still heading in that direction while we work our way to Financial Independence, 

6 years 4 months and counting..................... 

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