Not Sure If I'm Going Into Debt Or Just Using My Credit Card

Philip J. Fry (Futurama) thinking.

 We all use credit cards differently. Some use it like a charge card, borrow then pay in full when is due. Some use it as a loan, borrow then pay in installments. Sometimes, we have "pain" and "reward" signals when using plastic cards. Some people feel a rewarding experience from using their credit cards. I have a "pain" signal for myself that by using an ATM card pose a security risk by having to enter a pin. A risk of my card being hacked and a whole lot of "pain" and possibility that I may not be able to get my money back. I have that signal because it'd happened to me once, my ATM was copied, hacked, and used. But for credit cards, I lack a "pain" signal and have always treated it like cash. The pain comes much later when it gets me into debt.

Step 27 takes the financial literacy approach by educating the cost of taking on debt. We need to understand the terms such as interest or APR, length of loan, finance charge, credit limit, minimum monthly payment, grace period, over the limit and late fees associated with the debt. A much more easier approach is to just avoid it completely so that we would not need to understand it at all. When we use our card, we have to know exactly whether we are falling into debt by making that swipe purchase, since credit card increase purchasing power, but not increasing our income. If we avoid it completely, we know we are not falling into debt when we are making a purchase with cash.

 An interesting part is how debt affects us not just financially, but also emotionally and physically. Are we really ready to take on a burden of back pain, migraine, anxiety and depression by getting into debt? Debt is for the financially and mentally prepared.

Or do you, [O Muhammad], ask of them a payment, so they are by debt burdened down?

52. Surat At-Tur (The Mount; 40)