Lessons in Financial Management: Emotions and Credit Cards | GUEST COMMUNITY BLOG

Contributed by D.M. of the Metro Caring community as part of a series on learning financial management.

Of course, it’s logical to pay the rent and phone bill. It’s sort of a given. But when you use your credit card, there’s the temptation to think of your purchase as not using money. However, it could be riskier than using cash, with interest, penalties, the annual fee, and the long-term impact of accumulated debt. Using your credit for things you can’t afford and basing your choices on emotions is a risky way to manage your money. And yet very, very easy.

This is my struggle. One time, I spent more than a hundred dollars on a long-ago Easter Sunday. I’m still paying that off because once I started, it was tough to stop. Other days, I bought cute clothes, thinking I would wear the outfit eventually (though I never did). I paid for an expensive dinner to thank a friend for helping me, even though she would have been happy to go to a less pricey spot. Sure, it was about gratitude, but again, I decided based on emotion, not the reality of my financial status.

I'm not saying it's okay to ignore your emotions. Our emotions are part of what makes me and you unique and special.

When I buy groceries, I think of how good something will taste and the pleasure of taking care of myself. But then I choose to return the frozen cheesecake and focus on the long-term benefits of carrots steaming warm with butter and dill. Because when I have more money to take down that debt, the joy of being debt-free is that much closer. 

So, it's true. Emotions are good to acknowledge. But if you are like me, accepting the reality of how debt changes the future is also good. I will have much less anxiety and can have greater freedom to make choices beyond paying a creditor. Soon, I will be looking at new flooring in my home and planning a weekend trip to a city for the pleasure of seeing new sights and meeting people I didn't know before.

Credit cards aren't evil though. They are a tool. I made a rational choice to buy a mattress with my credit card. First, I called the credit card people and explained that I needed a new mattress (the old one had me waking in terrible pain, leaving me unbelievably cranky for hours). The lady I talked to said they were pleased to offer me a year of zero interest on any new purchases. I plan to pay off this purchase well before the year is over. Much of the decision-making process about which mattress is the right one was also emotion-based, so I checked out several brands, read reviews by other people, and then talked to people I knew well and trusted. In the end, I found a mattress for much less than I expected, by a well-known retailer. And I feel great getting a good night’s sleep without worrying about more new debt than necessary.

Without the credit card, I would have wiped out a chunk of my emergency savings. With a budget and planning, I will be out of debt sooner than I believed two years ago. With a credit card, I build a credit score and eventually that will also impact my financial picture. Now I feel better learning to manage my accounts so that later I can have more choices and more fun.