Once of the very first posts on this site was called “How credit cards are like alcohol“. In it, I stated that I didn’t believe that there was anything inherently bad about credit cards, but only that some people can hold on to them successfully and not fall into their traps, and others can’t.
If you are one of those people who can’t, then you just can’t have credit cards. Just like some people just can’t handle their alcohol. And everyone is, ultimately, at risk.
I’m a pretty neutral on alcohol. I may have a beer when I go out, maybe not. It’s certainly not a big part of my identity. And I never drink at home.
I feel much the same about credit cards. I use them sparingly, considerately, and not as a part of my identity. Meaning that I don’t use them every day.
But I’m not a teetotaler. I don’t believe that absolutely everyone should cut up their credit cards. I—gasp!—even use them occasionally myself.
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I travel for work fairly frequently.
I’m fortunate that, for the most part, the shine of work travel hasn’t abated for me yet. I love flying, I love airports, I love hotels.
What I don’t love is paying for work expenses while traveling.
Work expenses can vary greatly, from plane tickets and hotel stays to conference booth furniture and shipping fees. And it sometimes takes a while to get reimbursed.
This is money that I’ve spent, but isn’t technically my spending, since work will pay me back.
So, how does one send money but not actually spend money? 🤔
Oh right, a credit card.
What makes spending on a credit card so dangerous for us is that we haven’t actually spent the money, which can cause problems when you’ve actually spent the money that was allocated to pay the credit card off.
But in this case? It’s not a problem. And by the time the grace period is up, I’ve gotten my reimbursement.
Periodically I will put a large purchase on a credit card.
A single purchase is much easier to track and manage than lots of little purchases. And I am mindful that using my credit periodically is seen as a positive trait by the vendors themselves, which could be useful down the road, and could potentially help keep my credit score up.
Now, I don’t think you should focus too much on your credit score, but let’s face it, as long as employers check your credit history before making a hiring decision (and other intrusions into your life like that), being a purist and going for Credit Score Zero isn’t going to make your life any easier.
Also, on the off-chance that the protections for using credit really are better than with debit, this is useful when I feel like the outcome might be questionable and I want an extra level of risk protection.
When the month just won’t end
I’ll admit that I sometimes fudge the boundaries between the end of one month and the beginning of the next.
This happened recently when I had an unexpected expense come up at the end of last month. It wasn’t a big deal, and I could pay for it, but it just wasn’t in the budget for that month.
So I put it on a credit card and will actually pay for it this month. In fact, I already have.
I will admit that this is a slippery slope, and I wouldn’t recommend doing this on a regular basis. You could get very used to spending next month’s money this month if you’re not careful.
And technically, in all these cases, I could have just taken the money out of savings or even my float if I wanted.
But so much of budgeting is the mechanics of keeping track, so just like how the month boundary is a little arbitrary, what’s important is to find a system that works for you, one where you know why you’re doing what you’re doing.
And I know I can just reduce adjust my spending categories this month to compensate for it.
That’s (almost) it
The only other reason I put any spend on a credit card are those extremely rare situations when I apply for a new one and they have some kind of minimum spend.
Why would I ever apply for a new one? Only when the ongoing benefits of having a card apply even when I don’t use it. Because, with these minor exceptions listed above, I think a drawer is still the best place for a credit card.
But enough about me. When do you think it makes the most sense to use a credit card (if ever)?