Pay with Plastic: Yes or No?

What You Want vs. What You Need

Before using your credit card carefully consider if the purchase is something you actually need or just something you want. If it is not critical to your health or safety, you probably don’t “need” it. Even if you don’t need it, maybe you still want it. And maybe that’s OK.

• What are the consequences if you don’t make the purchase?
• Will going without it imperil your health or safety?

If you buy it, will you repay the full amount within the next monthly billing cycle? If you don’t pay it off and you carry all or part of it as a balance on your account, you are actually taking a loan, borrowing money to pay the purchase price plus interest charges…for something you actually don’t need.

Can You Afford It? – Living Within Your Means

If you can pay for it in cash, that’s probably smarter even if you have to save for it and buy it later. If you can’t muster the discipline to save for it, you probably don’t want it that strongly or you simply can’t afford it. If you charge it, it’s very likely that you’re using your credit card as a crutch—a tool to fool yourself into thinking that you can afford it.

Each time you make the decision to swipe your card, you’re deciding whether you’re using this tool to manage your money or to fool yourself into spending money you don’t have now and aren’t likely to have any time soon.