I’m a Dave Ramsey follower, a fan, a true believer. I have no doubt that his simple personal financial process changes lives. I know it has changed mine.
It works whether you make 24K or 240K a year. It works if you are deep in credit card debt or if you’ve never borrowed a dime.
But even I can occasionally get the But Dave’s. If you’ve ever listened to his radio show, you’ve heard the But Dave’s. People call in and say I get the process and I agree – BUT. They think their situation, intelligence or self-control is so different than everyone else’s; they should be given a pass on some Dave principal.
One of the most common But Dave questions involves the use of credit cards. Dave is very clear–you should NEVER use a credit card. He refers to credit cards as snakes and warns if you play with snakes you’re going to get bit.
But Dave, I pay it off every month.
This is where I was when we started Dave’s program. We had debt but not credit card debt. I was however, always living on next month’s paycheck. I lived on my American Express, put most of my recurring bills on it and then sent them a huge piece of my paycheck the 1st of every month.
Getting off this cycle was not easy but it helped a lot.
Once I quit using the card, I had control again of my check. I could plan what to do with the money rather than react to what I had already done.
I spent less. It’s a proven fact you spend more when using a credit card.
While I quit using my cards for personal use, I continued using my American Express for reimbursable business expenses. From software, to continuing education classes for the employees, to computers and client gifts; as a key decision maker at a very busy insurance agency, my card got used a lot. It was convenient, it was easy, and above all it was stupid.
When the owners of the agency and I agreed to part ways, it was not easy or comfortable. They were angry and insulted that I had refused their new contract and yet, they asked me to stay through the end of the year. I agreed not wanting to hurt the agency or the employees. For six weeks, our relationship deteriorated. On my last day, having completed all I promised, I left without a reimbursement check.
My reimbursement was paid. But it wasn’t be until my blood pressure maxed out and the “boys” demonstrated to their own satisfaction their absolute power.
What did I learn?
It is stupid, expensive, risky and unnecessary to use credit cards. If you can’t pay for it, wait until you can.
It is light-years beyond stupid to use your credit card for someone else’s stuff. If your employer can’t find a way to pay for their own stuff AND your travel expense without using your credit – start looking for a new job.
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