Being Responsible with a Credit Card

Last year we changed our lives by deciding once and for all to get out of credit card debt. A lot of changes came with that decision. We taught ourselves how to budget, with a lot of help from the personal finance blogging world. We curtailed most of our frivolous spending and we stopped using our credit cards.

Never for one minute do I regret that decision. With that said, we are starting to use a credit card again.

Wait! Put down the torches and pitchforks.

This choice doesn’t come lightly and we haven’t reverted back to our old naughty spending ways.

We used to have too many cards to count. That might have been one, of the many, reasons we were in almost $15,000 of consumer debt.  Now we only use one credit card that we have had since we’ve been together, our American Express card.  It has cash back rewards and it has a great interest rate, not that it even matters, there has not been a balance.  I’m finally learning!

I am learning to use it responsibly. These are some of the things we are doing to make sure we don’t land ourselves into another pit of debt.

Only use our card for planned expenses
There will be no impulse buys with our card. To ensure this we keep it safe at home and out of the wallet.
We have an emergency fund. There is no need for spontaneous spending on a credit card. That’s what allowances are for.

Track all spending
Anything that gets purchased on the credit card is put into the register. This gives me a better idea of how much I’ll owe. Instead of getting sticker shock when the bill shows up. I like to think of anything I put on a credit card as if were already coming out of my bank account because it is.

Pay off the balance in full
Since I am following the first two rules diligently this hasn’t been a problem. I will not pay one more cent of interest for credit card purchases. I've played that game, it's no fun. You heard it here, folks. I will not pay it in a box; I will not pay it with a fox.

Part of growing financially is to be responsible. We will never get to test our responsibility if we hide our credit card away in the freezer or a jar of peanut butter. Which are great places to hide credit cards if you are at that point. We were there, trust me. This is just another step we need to take toward reaching our goal of being financially independent. One day I may even put the card in my wallet.