Someone wise once told me never to “charge” anything I wouldn’t have left to show for it when the bill came. As a result, I don’t put food on credit. Instead I buy with debit. Whenever I go to the grocery store, it is always on debit. Same goes for when I buy newspapers or magazines or go to the movies. Our Netflix account is with debit.
There is something about paying for something you have long since consumed or thrown away. It’s galling and if you start to think of expenditures this way, you will be amazed at how quickly your credit card will go down.
Coffee at Starbucks? Will I really enjoy it a month later? (No.) So, do I have the money in my debit account to pay for it now? Yes, ok. No, then don’t get it.
Almost all our necessary expenditures, including homeowners insurance, food, clothes, etc. are paid for on debit. The one exception to this is gas for the car, because I heard gas stations will put a hold on the account for more than the value of gas if its hooked up to debit, so we use credit there. Using this rule of thumb went a long way in helping us keep our credit expenditures low.
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If you don't pay your credit card bill in full each month, then I agree with this. But we pay our credit card off in full each month, and we get 3% back for all our grocery purchases put on our credit card. Since we don't pay any interest + get a percentage back, it makes sense for us to put those expenses on our credit card.
ReplyDeleteMiss J's Mom: You make an EXCELLENT point! I should have been more clear, and will clarify in a future post. Thanks for reading :)
ReplyDeleteMuch like a hammer, you have to remember that a credit card is a tool. Use the hammer properly, and you can build a home. Use it poorly, and you will be in the doctor's office with a smashed thumb.
ReplyDeleteUnless a serious, serious emergency occurs - like that unexpected vehicle repair - nothing should ever go onto your card that you can't pay off at month's end. If you can abide by that, your plastic will never get you in trouble.
Jeffrey, you summed up what I was trying to say in one sentence: Unless a serious emergency occurs (and I will add since that is what they are for) nothing should go on card if it can't be paid off on due date. Period.
ReplyDeleteHi- Just a quick point, I pay for gas on debit and always show a $1 hold on my account until the actual charge goes through. I have never paid for gas on credit, and have always had this same experience. Thought that was worth noting....
ReplyDeleteHi Renee,
ReplyDeleteThanks for reading!
The story I heard on the news was that gas stations were placing as much as a $50 hold on debit charges because the price of gas was so expensive, they were afraid they would not be paid in full. To be honest it doesn't make sense to me, but as someone who almost always has a small balance on the debit because of our expenditures, I did not want to go over for a charge we didn't make. $1 sounds more palatable, but still not sure why they do it. I would rather not have any money of mine not available or worse, be given an overcharge for something I didn't buy.
Not sure if its as much of an issue now as it was when prices were through the roof, but still better safe than sorry.
Appreciate your thoughts though, please keep them coming.