Credit cards the truly disastrous spawn of evil aka the banks. Everyone thinks that credit cards are so wonderful and useful, but in reality they only make the American dream fade even more into the darkness. To achieve the American dream people need to build wealth, due to credit cards this is harder than ever before. Now assuming you are even the slightest bit familiar with investing and credit cards. I’m sure you well know that the average interest rate on a credit card is around 14.95%. This might not seem all that bad but in the stock market the average interest rate on a mutual fund is somewhere around 12%. So someone please join me in saying that it is awful that we get more interest on debt than we do on investments.
So let’s do a quick reality check, why are we using credit cards? I’ll tell you it’s because it is easier for all of us to spend on a card than it is to spend with cash. All in all using a credit card may be easier than using cash, but that is the whole problem. The easier it is to spend the less you think about buyer’s remorse. I challenge anyone who reads this too go to a store and spend $100 of cash and then at tell me honestly that there wasn’t some hesitation or possibly psychological pain behind it. When I say spend $100 cash I do mean on something that you don’t necessarily need. If it’s a need you are less likely to feel that pain, but if it’s something you don’t need spending the $100 in cash is almost always going to be harder to do than spending the $100 on a credit card.
So not only are credit cards ultimately evil due to high interest rates. They are also ultimately evil because of the fact that they make it easier to spend money on frivolous things that you really don’t need which only serves to hurt your financial status. So I hope in finishing this short read most of you will at the very least look further into what I am talking about, but I also hope that you only need this logic to snip up your own credit cards unless you have a legitimate reason to build credit like buying a house within the next couple years.