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April 6, 2020

[Podcast] SE01E10: Should you have a credit card? 2020 me vs. 2017 me

In 2017 I wrote about how bad credit card debt is, and presented my case against them. Do I feel the same way in 2020? Do I have a credit card today?

Transcript

Welcome to episode 10 of the podcast. 

In 2017 I wrote a podcast about credit card debt.  This is 3 years ago now, and I gave my clear views about what I thought about credit card debt, in fact I was kind of annoying I think!  A little bit like an ex smoker who has just given up, or is in their first year of giving up. Well I was a bit like that with credit cards!  

What I’ve found interesting is reading through old blog posts.  A few things have changed since 2017 – this was a year after I cut my credit cards up.  I had postnatal depression. If you’ve ever had depression, or experienced someone else’s depression, you might realise that their personalities are a bit different, they act in different ways.  For me personally, I was less empathetic to other people and I was pretty blunt about the way that I talked about my ideas and my opinions – it was a bit ‘in your face.’ I don’t think I’m like that anymore, I hope not, sometimes I might be if I’ve got PMS, aren’t we all!  But I’m not ashamed about what I wrote back then.  

Still, this is the thing when you are a content creator you’ve got to put things out there that the internet is going to remember forever, even if you do delete it.  Putting your opinions out there, especially in times of change can be a little bit scary. But that is what I’ve committed to as a blogger, putting my messages out there.  Sometimes it changes, and that’s fine. The intent is to share my story and my journey so I can help other people through theirs.  

What I’m going to do today is read through that post.  And most of you who are listening and following me at this point won’t have read that post.  It was a very long post, but it will be shorter when I read it don’t worry. I’m going to read that to you and then I’m going to let you know what I think about credit cards now.  I’m going to talk about whether my attitude towards them has changed, do I feel any differently about them, do I have any credit cards now, this is the important thing. Then let's reassess. 

READING: Credit card debt – the trap, the hook and the freedom

Alright, so that was the post.  It was in October 2017 – that’s almost 3 years ago.  And reading back through it now, I definitely sense the biggest difference is that I had less empathy for the different situations that we can get into that mean we end up depending on having credit.  Either using credit cards just to live by because we have to or using them as our emergency funds. I think that lack of empathy was more about scorn for my own situation, and kind of telling myself off like ‘how could you get into that situation?’ ‘Oh, you’re so silly.’  And that’s really come across in my writing. It’s come across in my attitude towards others with credit card debt. 

But I have learned to have a lot more compassion with myself, and therefore my audience as well.  I really do feel a lot more empathetic and partly I think that’s because I’m not depressed anymore.  I can think a little bit more outside of myself, and feel a bit more empathy for others. I feel that post was a bit ‘scorny’ and a bit ‘telly offy!’  A lot of really good points in there however that are still really valid.

Do I still think that credit cards are a bad idea?  

I do…. 

…There is a bank, and their motto is ‘be good with money.’  But how are you teaching that to your customers when you offer them credit in times of real need.  That isn’t teaching you how to be good with money, it’s allowing you to be a poor planner.  So I still think that credit cards are inherently bad. 

And I know you’re all wondering – do I have one today?  

No, I still don’t have any.  

But that did not stop me from trying to apply for a credit card a couple of years ago because the rewards lured me!  I thought we could shift a lot of our spending onto a credit card and get rewards for that. I almost fell back into that trap.  I even added up all of the rewardable spending that we were doing that we could shift to a credit card, thankfully, they actually refused to give it to me!  I am so grateful for this! Because I had a real moment of weakness there.  

This is not to say that I won’t ever apply for a credit card again.  But it will be a little bit like me starting smoking again (I smoked when I was in my late teens, early twenties) –  it doesn’t align with my values, I don’t believe it is a good thing, and I would only be smoking because I had gotten sucked back into that trap. 

So, no, I don’t think credit cards are a good thing.  But I understand now that there are so many different reasons why people get into this situation.  It is multi-faceted. It’s never just because you’re bad with money, it’s never just about that.  There are always conditions that create this situation.  Like not having a great financial education, or maybe you have always had a good paying job and never thought about your credit cards much and just used them as a habitual thing then came across hard times and now you’re stuck with them.  Maybe, who knows and that’s quite frankly your business. So who am I to tell you this is the wrong thing to do? You would have heard me talk about this so many times before – you do what you believe is best for you at the time, based on what you know and understand at the time.  And that’s it.

So if you’ve got a credit card, that’s fine, we can still be friends! 

The purpose of The Leveraged Mama – although we are shifting more towards income creation than income preservation – I still believe, and it doesn’t matter how much money you are making, if you are spending it on things like credit card interest or things you bought yesterday, it isn’t the best use of your money or your time.  You can make more out of your income by getting rid of credit card debt. 

I still believe that banks and lenders can be a bit more responsible than they are these days.  

I still believe that more financial education is required, so we don’t have to resort to having to use credit cards at any time.  

I still believe that we need to be more aware about how our minds work, how our brains work and how all that reward seeking behaviour works.  You’re responding to the advertising because they know how your brain works. Really it’s up to you to figure out how your brain works as well so that you don’t get sucked into things, like I did and probably will again.

I would love to hear where you’re at in your financial journey in terms of income preservation.  Do you feel that you could be doing more to preserve your income and be better with your spending than you are currently?  Or do you feel like you’ve got it really dialled in?  

If you want to drop me a voicemail on the Anchor app, about this episode please do.  I hope that you didn’t feel triggered by that blog post. But if you did and you kept listening then I’m flamin’ proud of you!

Have a great day.        

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