Credit Card: Do We Need It?

Do we need credit cards? No, we do not need credit cards. We could still have our belly full, dresses to wear, and home for shelter, without any credit card. Why? Because all of our need could only be buy by MONEY.

Now, is there any advantages in having a credit card? Very sure YES.

1. FIRST Advantage, it could serve as a SECURITY, a back up to cover some expenses in case of emergency, and we don't have any fund to cover such expenses.
   For instance, if we (or somebody we love) are sick, and there are no insurance to cover the doctor's bill. At that moment, there are no sufficient fund that we got. We could use the credit card. Think of some other emergency cases that we could find the credit card as help.

2. SECOND Advantage, it could help you in tracking our financial plan, and evaluating our financial report against our financial plan. At the end of each month, we will get a credit card bill, that contains details of all our daily expenses in that month. No need to record our daily expenses manually.

3. THIRD Advantage, we could make 'Free Money'. We get the money for nothing. How to get Free Money?
   SAVE in the Savings Account, the sum of MONEY we will use TO PAY OUT the credit card bill at the end of the month. At the end of the month, we take the money to pay out the credit card bill, and there are some money left. It is the interest gained from the money (to pay the credit card bill) you save.
   Beside that, we also earn a small amount of 'money' from the Bank's point reward or cash-back program (yes it is not a real money, but at least you could use it to buy some stuff at the future).

Remember, pay all the credit card bill at the end of the month. If you don't, then you will end up pay the credit card bill interest, since the credit card interest rate is a lot higher than your savings interest. When it happens, certainly you end up with less money.

If we pay out all the credit card's bill at the end of the month, we could enjoy the benefits of the credit card to the maximum, leaving its bad characteristics behind.

So, what do you think?

PS: Comments and corrections are very welcomely invited.

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Further Readings:

• Robert Kiyosaki's Books, especially Rich Dad Poor Dad.
• Various References, and Personal Contemplation.