Credit cards are for transactions; not to borrow money
In a recent post about credit card interest rates, Philip Brewer at Wise Bread explained:
I use credit cards for transactions, not to borrow money.
One of the smartest things you can do for your financial health is to pay off the total balance each month on your credit card. Whenever we use a credit card, we’re borrowing money. Interest gets added to the balance if we don’t pay off the total amount we owe each month.
The big money-maker for credit card companies is consumer interest. They want us to carry a balance. But they don’t make us. A lot of people just do. Why?
Please don’t say it has to do with how much money one makes. At the age of twenty-two, I never carried a balance; nor do I now at forty-two. Just because I have an available credit limit doesn’t mean it’s my money to spend.
What makes some people get this concept and others don’t? Behavior and money… sometimes it just doesn’t make sense to me.
Photo credit: stock.xchng.