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As I sit down to write this, I realize I am at a severe disadvantage. Credit card companies hire psychologists to assess the perfect approaches that will burn the image of their credit card into your memory and make you want their card when you get a chance. They analyze strategies and spend millions of dollars each year in advertising to hook you with their credit card because they know that your first card is like your first love; you never forget it and you have a high emotional attachment to it.
What I am asking you to do is similar to God asking Abraham to sacrifice Isaac. Okay maybe that is a little over the top… but I am suggesting you stop right here and have some plastic surgery.
Collect ALL of your credit cards and with a pair of scissors, cut each one of them into little pieces. Can you do it? Will you do it? Why should you do it? If you like being in debt and being the slave Proverbs 22:7 talks about, this is not for you. But, if you’re looking for an alternative to credit card slavery, this will help.
If you would have suggested this idea to me a year ago, I would have probably said, “Not a chance! I could, but what about emergencies, travel expenses and Internet purchases? Besides, I have the REI card and get 1% back on all my purchases, so I am looking forward to getting more free outdoor gear. There is some merit to that mindset but there are some serious flaws too.
The most common reason for getting a credit card is to “protect” you in case of an emergency. So what is considered an emergency? Aside from going to the hospital and maybe fixing your car, what other emergencies are there? If you do have an emergency and need money, one suggestion is to head to the financial aid office. Ask for possible loan options. My experience is that you can get an unsubsidized loan for up to $5000 in 3-5 days, which is probably faster than you will get the bill. The major advantage is that the interest rate is at 6.8% versus 13% or more on your credit card.
The next reason for a credit card is to pay for travel expenses. I just talked to Enterprise and they said you can rent a car with your debit card if you have: 1) An in-state driver’s license, 2) a recent utility bill in your name, 3) a recent pay stub. This information helps protect the rental car company if the renter fails to pay. Hotels also accept debit cards or cash for rooms.
The purchase of plane tickets, usually done on the internet, can also be done using a debit card. Again, the advantage to using your debit card is that you won’t go into debt. You can only spend the money you have available. Other internet purchases, such as Ebay and Amazon use secure websites that encrypt your information. One thing to remember with these sites is to not allow them to save your debit card information.
The last flaw is with the “free stuff” you get in return for using your credit card. I thought this was great. The 1% back on non-REI purchases encouraged me to pull out my credit card for everything. I admit that it felt good to buy a backpacking tent, pack, sleeping bags and other gear with my refund. But I found myself justifying the purchase of things throughout the year just so I could increase my refund. The first year without my 1% refund, I spent 20% less in food alone. That’s enough to pay for all the REI gear I wanted. So I ended up spending more money foolishly with the credit card.
The second negative to the 1% refund didn’t catch me but does catch many others. I’m a geek so I knew exactly how much I had spent each month and knew that I had enough to cover the bill when it came in. If I would have missed just one payment or left a balance on the card, the great 1% deal would have been wasted on interest fees.
Have I convinced that you don’t need a credit card? You can use either a debit card or cash to do everything that you did with a credit card. The advantage to using only cash or a debit card is that you can’t spend more than you have. Sure you can write “hot checks,” but if you try to spend more than you have with your debit card, you’ll be rejected. This will encourage you to build the dreaded budget and live to it instead of just waiting for the credit card statement and opening it like a present, not knowing what you are going to find.
If you need help with your budget or advice on how to handle money, talk to your campus minister. He can assist you in setting up a plan and help keep you accountable to it. Another idea is to enroll in a personal finance class offered by your school. My goal is not to destroy your fun and strap you down but to prevent you from getting to that point.
The average Freshman ends his/her first year with $1500 in credit card debt.
By the time he or she graduates, it has doubled to $3000. This is added to the student loans that will be maturing at the same time. You will be forced to spend the first years of your “freedom” trying to pay the minimum balance instead of doing the fun things you looked forward to when you “got a real job.”
My encouragement to you is to be smart with your money. Take your credit cards to the shredder altar and give them their deserved end before you become slaves to your debt and wonder where all your money is going.
Jason Swick is currently serving as a campus ministry apprentice at West Virginia University (Mountaineers for Christ) under the direction of Jason Locke. Jason is pursuing a Master of Arts in Christian Ministry from Harding University Graduate School of Religion. He hopes to enter into full-time campus ministry at the end of his apprenticeship.
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