Oops but Credit Cards Aren't Free Money!
Updated: Jan 11
You walked into the store with the intentions to purchase one pair of gold shoes and one white shirt. Fifty-three minutes and two seconds later your shopping cart is filled with pots, pans, one pair of black shoes, one red and no white shirt. You remembered your best friend, sister’s daughter is having a birthday party and before long you’re in the kid’s section looking at cute little dresses. What the heck?! All you went in for was one pair of gold shoes and one white shirt! Chile, it’s not even pay day or pay week. To top it off none of these party items were included in your budget.
Are you taking into consideration the credit cards you’re using isn’t free money? It’s. Not. Your. Money.
Let me break it down for you. When you apply and are approved for a credit card, an interest rate is applied to that card. When you make purchases and do not repay the FULL balance by the due date, you pay interest. On your statement cycle date, (check your statement for date) pay up to 90% of the balance. Only 30% of the balance should be reported to the credit bureau. (10% is recommended/best)
Ok, back to you and all these unnecessary spending. Your white shirt and gold shoes should already be calculated into your budget. After you make your purchases repay your credit card with the money allocated for those items. Your budget should entail ALL expenses for the week, month, quarter or year; whichever time period works best for you. Remember, if you cannot implement an expense into your budget you probably cannot afford it. Don’t pressure yourself into buying things you really cannot afford. Nobody wants to be in a cycle of debt. It’s a heavy weight to carry.
All you came for was one pair of gold shoes and one white shirt. You left without both items but still swiped that card. Credit cards are not free. Budget! Spend! Repeat!