How to use a credit card: Part 1.

When I was in college all dorm rooms had landlines, which meant credit card companies would call us constantly, trying to sign us up for an account. (Back in those days, eighteen-year-olds didn't need another signer) Pretty shady, and addressed during our little economic meltdown later that decade. Unfortunately the lure of being able to spend more than c. fifty dollars a month was too great, and I gave in spring of freshman year to Visa. Later that year, I also sold my soul to Discover.

As you can imagine, I was an idiot with both cards, which is a whole other story I'm too ashamed to tell, and it was a mighty struggle to become debt-free, after which I swore off debt for about seven years. Along the way, I learned a lot about the good, bad and ugly of credit and credit scoring. Today I have one credit card with a nice credit limit and I spend all my time obsessively not using it.

You can be like me. In fact, I want you to be. So now, for Part 1 of this series, I will now launch into everything I wish I had known when Visa and Discover were unethically cold-calling me back in the day.

It's not free money. Period.

Credit cards are not the answer to your prayers. They are not for funding things you cannot afford. They are not for spontaneous splurges. They are not for paying other debts. They are not for when you feel like you want to "be bad." Credit cards are not fun. Credit cards do not make life easier. Credit cards do not give you freedom.

Now that that's been established.

The concept of credit is simple: borrow a sum of money to be paid back in installments over a period of time. It can be helpful in a number of situations, a few of which I'll enumerate at the end. But at no time in human history has credit ever been the same as a gift. If you open a credit card for the purposes of repaying it in installments, you will end up paying more than you borrowed. End of story.

Everyone knows that you have to pay back what you spend with a credit card, but a lot of people don't know how it works. When I got my first credit card I didn't know how to interpret the statement I received, so it was a few months before I understood that I was being charged money on top of what I had actually spent. This wasn't a problem for a long while - I was responsible enough, and they gently increased my credit limit as time went on so I was never in a bind...until I did start approaching that credit limit.

I would call (yes, call) the customer service number to hear my balance. Good enough, I'd think. I'd call back a few days later, having not used the card - yet suddenly I had fifteen or twenty available dollars less than I did before.



What I'm Reading: Snapping by Flo Conway and Jim Siegelman
What I'm Watching: finally doing the last season of Mad Men
What I'm Listening To: greatest hits of the 80s!
Mood: cautiously optimistic
Smells: ...normal air?
Sounds: the ceiling fan and spring birds
Temperature: 70s
Thoughts: we never fear the past