Is There a Better Way?

An argumentative essay on the use of credit cards, written by Deborah Bruce.

In America today, almost everyone uses a credit card. We buy almost everything with credit; fuel for our cars, groceries, and other necessities, not to mention entertainment and things on the internet. It’s something that everyone does; so what could be wrong with it? Have we ever dared to question whether using credit to buy things is really the best way? Can paying with cash be a better alternative, or is it too risky? I say there is a better way than credit.

What about the convenience? It’s so much easier to just whip out the plastic than to count out the amount of money you need to buy something. In that aspect wouldn’t it be better to use a credit card?

When we use a credit card, we tend to spend more than when we use cash. Studies show that when the buyer uses a credit card to buy their groceries, they tend to spend almost double what they would spend if they used cash¹. And, when you can only spend the money you have in hand, you can’t buy those things you can’t afford, and you can’t spend money that you don’t have. But when you use credit, you are more apt to buy those things you normally wouldn’t if you used cash, thereby putting yourself even deeper into debt. Debt is yet another thing that Americans feel is something you have to have. And yet, God says in Proverbs 22:7 that the borrower is slave to the lender. Do you want to be a slave like that? I don’t! I would much rather pay for something with my own money, rather than use someone else’s, and have to pay them back.

But what about big purchases, like furniture and cars? Are you supposed to pay for that with cash? How could you possibly come up with that much money all at once? Wouldn’t that be a good time to use a credit card?

With big things like that, yes, you can save your money and buy it outright. Paying with cash for things like that makes quite an impression, and you can probably get yourself a deal by showing them the money right there, but you need to, you can also pay for such things with your debit card. Debit is by no means the same as paying with cash, but it is there if you absolutely have no other choice. Yes, it is quite possible to not use credit in such situations, and you probably will save by paying with your own hard earned money.

But carrying cash is dangerous! If someone were to steal your money, there would be virtually no way to get it back. But, if they were to steal your credit card, it would be possible to keep them from stealing any of you money. And, if you bought something with cash and then realized it wasn’t what you thought it was, and wanted your money back, it would be way harder to do that with cash then it would be if you had used credit. Thus, wouldn’t it be better to use a credit card?

Consider this. On average, cardholders carry a balance of $8,367 on their cards from month to month, paying an average of 18.3% in interest. In a year, they will pay $929.70 in interest payments². If instead they had used cash that year, they could have kept their $929.70! I really don’t think that in a year that much money or more would be stolen from out of your pocket. Thus, by using a credit card, you would lose more money than if you used cash. People can’t look through your pocket or purse, and see that you carry cash instead of a bunch of credit cards. As far as they know, you’re like everyone else. And about getting your money back for something you bought that you want to take back: here you just have to be careful where you put your money. And if you do have this problem and lose your money, there is a lesson learned. Be careful where you send your money; you just might not be able to get it back.

But what about buying things on the internet? You can’t use cash then, and wouldn’t it be unsafe to use a debit card? If someone were to steal your number, they could drain your bank account. In this case, wouldn’t it be better to use a credit card?

Credit cards are no less dangerous than debit cards. If you use a debit card made by VISA, it will have all the safeguards that a VISA credit card would have. Sure, it is possible that someone might steal your debit card number and spend all your money, but that’s where you need to be very, very careful, like you ought to be with all your purchases. What we do is we have a separate account that we use for buying things on the internet that has in it only the amount we need to buy that item. That way, even if they did get our number, they couldn’t take all our money. But even then, we ought to be very careful where we send our money.

But with some credit cards, you get rewards. When you spend so much money, you can get prizes, airline miles, gift cards, and other neat things like that. Shouldn’t that be a good reason to have a credit card?

The way that reward process works, you have to spend quite a lot of money in order to get them, and then you don’t get back near what you had to spend to get it. And, you still owe them money, and you’ll have to pay them back sooner or later. And on top of all that, they have so many rules and conditions, and they hold the right to back off their end of the deal at any moment. They are in charge of all of it, and you are pretty much at their mercy.

Besides all of this, by not using a credit card, you can be debt free. You don’t have to owe any credit card company any money, and have to pay them huge amounts in interest. Instead of being normal like everyone else (statistics say that the typical household debt totals more than $38,000)³, you can say “Yes! I am debt free!”

I urge you to consider what I have presented here, and do your own research, and see for yourself that there is a better way than credit. Help me, and others likeminded, as we strive to make America a better place, a place where everyone can find financial freedom.

Notes:

¹ Robert J. Klein, “When to borrow, when to pay cash,” D & B Reports (March/April 1993), 63.

² “Average Cardholder Balance,” CardTrack, status report cited by RAM Research Corp.

³ Jeff Blyskal, “Loans,” The Consumer Reports the Money Book (New York: Consumer Union of United States, Inc., 1995), 32.