Credit Cards and Cigarettes


I came across a very interesting article on the US financial crash of 2008. It speaks to the confusing dealings of the major banks in the world. It tells a story of influence peddling on the back of the middle class. The middle class and poor of the world have continued to have less disposable income (due to inflation) and more debt while the large banks have made millions in profits. It’s a sad story and I’m living it along with you.

I certainly don’t know the US financial system in and out, but one thing I do know is tha debt is bad. Credit Cards are bad, purchasing a new car on credit is bad but so many of us do it.

Using a credit card to make purchases means you will spend more (PDF) but so many financial bloggers say that a credit card is a tool for getting a great credit rating. Sure they often link to ’10 Tips on Using Your Plastic Wisely’ but the pitfalls are so huge in light of any benefit that it’s simply not worth having them. Saying that a credit card is a financial tool is like saying that smoking is a tool in building your personal image without citing the terrible health risks associated with smoking. The health risks of smoking make the act of smoking not worth it in any fashion.

If you haven’t heard of Dave Ramsey then stop now and get his book (Amazon Link). My wife and I are going through his financial plan which has enabled us to pay off $12k work of debt this year alone. We have a bit to go still, but it feels liberating to see all those little payments we were making disappear.

The only purpose of this post is to try and help pass on the freedom that we are feeling to someone else. Pay off your debt, cut your credit cards. As Dave says:

Live like no one else, so you can live like no one else.


One response to “Credit Cards and Cigarettes”

  1. Eric Mann says:

    I actually sponsored a Dave Ramsey seminar once, and I was blown away by his “snowball plan” for paying off debt. It really does work. Since I’ve gotten them paid off, I’ve stopped using credit cards entirely. Instead, I set up my own “self-funded line of credit” for when I need to make big purchases. Not one of Ramsey’s principles, but I like to think he’d suggest it.