The Credit Card Game: Don’t bother playing if you can’t pay the bill

While this website focuses on maximizing the value of credit cards, it is important for us to highlight the dangers associated with using plastic (or metal, depending on your card)

When I was growing up, our family used cash for most purchases. The theory was simple, if you didn’t have enough money to pay cash for something, then you shouldn’t buy it. I remember my parents getting cash out of the bank or at the supermarket where they would write a check for $50 more than the grocery bill and get cash back. And many of my relatives would carry hundreds of dollars in cash. It’s hard to believe, but people actually found ways to get by prior to the advent of the ATM machine and the ubiquitous use of credit cards. I learned at an early age that credit cards are for emergencies only! Boy have times changed. 

Compare that to today’s generation and how credit cards are used for almost every purchase. Heck, some stores don’t even accept cash anymore! My son’s favorite food place is Sweet Green, but when he went there with his hard earned allowance, he couldn’t buy anything. I remember one time traveling with three co-workers and they couldn’t get out of a parking garage because they didn’t have $5 in cash between them and the garage did not accept credit cards. Or when I was working on a college campus, and sales at the Subway sandwich shop were quickly going south. It wasn’t due to the quality of the sandwich. It was one reason – the store didn’t accept credit cards and most students don’t carry cash anymore.

Proceed cautiously. While this website highlights on maximizing credit card rewards, it is important to highlight the people who should never play the credit card game. We will call these prerequisites to getting in the game:

#1 Paying your credit card bill in full on time

If you don’t have the money or don’t plan on paying your credit card off in full every time, you will simply lose the credit card game. You will lose big and potentially go down a very bad financial path. It is that simple. Many of the cards I hold in my wallet have interest rates as high as 20%. That nice weekend getaway hotel you went for a great $99 rate? Well guess what – it will likely cost you over $200, after you pay it off over time. Since I pay off my credit cards each month, I could care less what interest rate they charge. I would easily swap more credit card benefits for a higher interest rate, because I am never paying interest. I couldn’t even tell you what rate any of my credit cards charge.

#2 Signing up for autopay

In this day and age of constant communication and serious multi-tasking, it is simply impossible to keep track of all of your bills. When I was younger, I would spend my sunday evenings going through all of my bills, balancing my check book (remember that?), and making sure all of my bills were paid. Right now, I’ve got about 15 monthly bills (cell phone, utilities, cable, mortgage,insurance, and my many credit cards). If I didn’t have autopay, i would simply have no time to track everything. And I would quickly pay interest and late fees. Since I no longer balance my checkbook physically and analyze it on-line, I usually keep a few extra thousand in my checking account, to make sure I don’t overdraft. While I am not making a lot of interest on that money, it is worth having it as a backup. It’s just too hard to keep up.

In summary, if you don’t meet the prerequisites, don’t even think about getting in the game. You will lose and lose big.