How to Use Credit Card and Avoid the Sins of Money

Many people who are deeply in debt and struggling to escape from financial troubles want to see credit cards as the source of the problem. They blame the high interest rates and harsh penalties buried in the fine print of other credit agreements, or the aggressive efforts by card-issuing companies to promote credit even beyond the capacity of some people to manage it. Credit card companies are not blameless for today’s epidemic of uncontrolled debt. But for most people who are in financial trouble, the real danger is not in the card but in themselves. The card is just a piece of plastic, and you can control its use if you are in control of yourself. The trouble comes from deadly emotions that lead people to misuse credit, whether it is in the form of a piece of plastic, an overdraft facility, or a loan from a friend. Financial problems are not always about money, more often, they are about how you think about money and how you use money.

Knowing these money truths will go a long way to save you indebtedness:

Denial – Denial enables you to ignore the reality of your financial situation by refusing to think about a spiralling debt situation, or by compartmentalising the problem so that its impact on your total financial life is neither seen nor felt. Are you keeping financial secrets from the people closest to you? Do you find yourself denying-perhaps with a show of indignation that you have any financial problems at all, even when well-meaning friends or family members offer to help? These can be symptoms that denial is wreaking havoc with your sense of financial reality.

Entitlement – “I deserve it” is the three-word mantra that reveals that emotion’s influence over the way you handle money and credit. A sense of entitlement may be tied to a desire for status, to trying to keep up with the Phillips, to the feeling that you are smarter or better than others, or to a craving for respect and value in the eyes of others. People whose approach to money is distorted by a sense of entitlement rarely realise that hard work is needed to fulfil their desires. Instead, they expect good things to come without effort – a sure sign that they are out of touch with the way the world actually works.

Compensation – For many people, their first overdraft facility or credit card unleashes memories of unfulfilled childhood desires. They remember all the toys, clothing, and other things they could not have while growing up, or that they had to wait until Christmas or their birthday for. Now all those goodies are available just by handing over that little plastic card. Credit enables us to compensate for those early feelings of being deprived by indulging is immediate gratification now. But when this emotion from the past becomes a thoughtless justification for repeated indulgence, so that debts and interest charges build up every month, the deprivation of the past can actually begin to damage your future.

Delusion – Many people succumb to magical thinking about money. It manifests itself most often when young people get their first credit cards and discover they can by thousands of dollars worth of goods, but only have to pay back little monthly. They pay no attention to the interest that is accruing on the outstanding balance, which seems small at first. Lacking self-discipline, they make the minimum payment and then charge the same amount (or more) during the next payment period. The outstanding balance starts that slow-but-sure-creep upward. But the debtors deliberately (sometimes ignorantly) ignore that amount. They only number they see is the minimum payment amount, which lets them maintain the lovely delusion that they are able to afford this debt.

Conformity – This is the “everyone’s doing it, so why shouldn’t I?” mentality. It is strange when it comes to credit, some people who are otherwise level-headed and mature feel that irresponsible behaviour is acceptable because everyone they know has similar problems. Behind this irrational conformity may be a secret belief that other people may have discovered how to get their hands on “free money”. But, as every individual eventually discovers and as our society as a whole will one day learn, the supposedly free money that a credit card provides will have to be repaid, no matter how painful the ultimate price.


Over-Optimism – This smiling devil is the belief that somehow a financial problem will miraculously correct itself. A person saddled with over-optimism often thinks he or she is simply being “positive” about the situation and dismisses other thoughts as being “negative” or “gloomy”. It is a way of denying personal responsibility and absolving oneself of blame for short-sighted financial decisions. If you fall into this trap, you will find your cheery disposition keeping reality exactly where you want it at arm’s length even as your financial situation worsens.

Fear – The sight of rows of numbers makes some people react like a rabbit frozen in the headlights of an on-coming car. Some people suffer from a genuine financial mathematical phobia, more often than not it is affectation or excuse that enables people to run away from their financial duties sure give away.

Know What You Need To Do – The truth is that many people have a pretty good idea about what they need to do to fix their financial weakness – spend less, earn more, pay off debt, and accumulate savings. Take control of your inward emotional demons today and stop blaming someone or something else.