Are You Being Irresponsible to Your Children if You Carry Credit Card Debt?

PD*18739912When I was in my twenties I used credit cards to pay for almost everything. The convenience! No jangling change in your pocket! No waiting to save before you buy!

In those days with only one mouth to feed (I was skinnier back then) and a job in corporate philanthropy, I almost always managed to pay off the balance in full each month.

Now that we’re a family of six, when I use our credit card we struggle (and usually fail) to pay it off.

Though I’m sincerely grateful to Mr. Visa for financing our recent escape to rainy California, I no longer see this rectangle of plastic as my friend.

Credit cards are bad for businesses

I found out when our customer-owned food co-op did a campaign to encourage shoppers to use cash, that credit cards charge businesses 2 to 3 percent with some kind of minimum on each purchase. Many small businesses operate on a very small profit margin (for instance, in an effort to make organic food available to everyone, the Ashland Food Co-op offers “basic pricing” where we barely charge above cost on popular items like organic bananas and organic flour) and the percentage they must pay to the credit card companies can make small businesses actually lose money on transactions. This is why many local businesses only accept cash or checks.

I don’t think most people realize–I know I didn’t–that if you use your credit card, the profitability of small businesses is diverted to the credit card company. A multi-billion dollar business like Walmart is barely affected by these fees but credit cards can really hurt the non-mega stores that actually have a conscience.

Credit cards are bad for consumers

Studies have shown that people who carry cash spend less money than those who use credit cards.

Credit cards foster the mentality that has gotten our country into so much financial difficulty in the past few years: BUY NOW! BUY MORE! BUY BIGGER!

You wouldn’t go to the bank and take out a loan for a few thousand dollars for some extra spending money, but that is what the credit card company gets you to do every time you carry a balance. When you add up the astronomical interest most credit card companies charge (usually between 17 and 25 percent), to say nothing of the $25 to $35 late fees if you misplace or forget to pay a bill, you’ll realize that romantic dinner for two that you thought you spent a hundred bucks on back in 2001 actually ended up costing several thousand dollars.

The credit card companies make their money on the merchants up front, then make more off you in interest and fees, a win-win business model for the card companies and a lose-lose situation for our family.

I feel guilty about carrying a balance and I do think getting into credit card debt is not a financially responsible or smart choice. What do you think? What percentage of your purchases do you make on credit? Are you able to pay off the card at the end of the month?

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15 thoughts on “Are You Being Irresponsible to Your Children if You Carry Credit Card Debt?”

  1. It is true that credit card fees hurt small retailers (like myself) the most. Your readers may or may not be aware that Amex is actually the most difficult one for stores to use, as they charge the highest fees, and actually hold the funds for several days (making more interest o the money!) before allowing it to flow through to the shop.

    It is also true that carrying a credit or bank card is safer than carrying cash for the consumer. I accept all types of payment and credit cards for customer convenience, including the dreaded Amex! Necessary evil, I guess.

  2. Credit card debt is stressful, anxiety-producing, and eats away at people. Best avoided, if at all possible. And it’s a generational phenom: My parents (and their parents) generation didn’t live beyond their means. They just did without.

  3. It’s ironic that as I write this, the ad at the top of the Mothering page is for a Chase credit card. I’ve complained elsewhere on the site, but it seems that Mothering’s switch to all digital has involved a change in advertisers – which to me seems like selling out. All sorts of major corporations are now advertised on the Mothering site. Campbell

  4. Sorry to sound like a drag, but as the screen refreshed after I posted my above comment, there are now two ads for credit cards. One for Chase and one for a Russel Simmons pre-paid debit card. I thought he was a musician? I guess anyone’s for sale.

  5. Natalie – I want you to know that I share your concerns about this kind of advertising. I’ve been really upset a couple of times when fast food ads appeared on this blog (interestingly once when I wrote a very critical piece about fast food and several fast food ads streamed through it. I took screen shots and complained to my editors, who promised to look into it) and I also object to the candy ads that are clearly designed to be marketing directly to children. Mothering has been in the process of entirely changing their business model and I know they have been trying to filter out some advertising and articulate guidelines about others. The Web advertising is a new frontier for them. I wish I were at liberty to divulge more details but I’m not.

    What I can tell you is that I will not compromise any of the content on this blog in consideration of advertising. Ever. So perhaps there can be some satisfaction in knowing that companies are advertising on a page that is critiquing them? My post on food dyes and rant against sugar had an ad for cereal that contains sugar and a lot of other crap. My sincere hope is that the post will help sensitize readers to this kind of brainwashing.

  6. Thanks for your response. I love your blog and admire you as a parent and a citizen. I am, however, considering abandoning the Mothering website because of the ads and some other issues that I have with the all digital shift. It makes me sad to contemplate that, because I feel like there’s nowhere else to go. I don’t want to live my life on the computer, and I don’t want to view your blog if it gets back to Target that your blog got 200 hits last week and they feel that they should keep advertising with you. (Anyway, my husband said that he thinks that that’s part of how internet ads work.) I believe you to be a person of great integrity. Keep fighting the good fight.

  7. I know I’m in the minority around here, but I use credit cards for just about everything. I don’t look at it as an easy way to spend money I don’t have – I pay my balance every month – but as a convenience and budgeting tool. I use a Mint app on my phone to track my spending, so I can check the budget before making a purchase to see whether I’m sticking to my limits. I also rack up miles and hotel points, which enabled my family to take a trip last year to my husband’s home country that we would not have been able to afford otherwise – for our family of four we only had to pay for one flight and the taxes on the other three, and all but one night at a very nice hotel were paid for with points.

    I think like anything else it depends on the user. Should you carry a balance? No way. But if used mindfully I don’t see anything wrong with credit cards.

  8. oh i am sure it is just computer generated…the computer sees you writing about fast food, can’t judge the content, just spits out ads about fast food. sees you writing about credit cards, produces ads about credit cards. One solution that works for me is using Firefox Browser with add-ons that block advertising. I never see any ads that I can think of…for awhile I thought Facebook had stopped advertising, LOL, then logged on with a friends computer and a different browser and realized it was my Firefox. As far as I know, IE, Safari, and Google Chrome don’t have this feature.

  9. I just wanted to say that as far as advertising most web based ads are placed strategically b/c of key words so it makes sense that an article that repeatedly uses the words “credit cards” would have credit card ads. Just like an article about fast food would have fast food ads. I personally don’t think that the site is selling out b/c it uses some web ads to earn an income while offering readers a free place to come together and share ideas and concerns.

    As far as debt my husband and I are in our twenties and have 130,000 in debt (including our house, cars, student loans, medical and some consumer debt) Its extremely stressful for us with two young kids (3 &1) but in today’s world unfortunately some debt is necessary.

  10. I am shocked and stunned. Loved this little article, but learned from the comments that the magazine is gone. What the heck?!?

  11. We have one credit card with a $16,000 limit. We use it sparingly and pay it off in full every month. If we can’t do that, we don’t use it. We don’t use it to pay for everyday purchases because we know that it costs retailers money. We do use our debit cards quite often, but that costs the retailer less than the credit card.

    It is nice to have around for emergencies, but we also have a considerable amount in savings that we can go to first.

    We occasionally take advantage of free interest offers on store cards for big purchases, like furniture. Again, we never, ever pay interest and pay off the balance on time and before the free interest period ends.

    I think credit cards are just fine if you are using them responsibly. When I was younger I did not – and I had around $5000 in debt to show for it.

  12. I do love this piece. Back before DH & I were married and had kids, we used credit cards like there was no tomorrow. We got in way over our heads. Since having our first child, we quit. We do however use our debit cards for absolutely everything and anywhere that I can put my pin number in, I do. I was wondering if you could possibly do a follow up piece on the debit card side. Because if this is hurting small businesses, I’d like to stop and do our paying a different way. Thanks so much for the article!

  13. I think that the result of having a credit card depends on the person using it. Yes, credit cards do result in fees when they are used. However, to say that credit cards are irresponsible for anyone to use is a big statement. We use our card for online purchases, and we do a lot of shopping online because of where we live. We live in a small town that doesn’t have many items we need (Britax carseats are one example). So, we use our credit cards to buy things we can’t get near where we live. After using our cards (and paying them off) regularly, we earn points. We can use those points to buy gift cards at stores like Target, Walmart, and Amazon. So, we do that. Then, we use the gift cards to buy things like groceries, carseats, Christmas gifts for family members, etc.

    I know that credit cards can get away from people easily, but that is the responsibility of the user. Credit cards in and of themselves do not have to be an irresponsible, negative tool.

  14. How is the article title connected to the article at all? I was waiting to see the part about being/feeling irresponsible to my children by having credit card debt.

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