You may have read or heard many times about the advantages and disadvantages of using a credit card. So you should already know that the Card can be a villain or the hero of your Personal Finances: it will depend on how you use it. What we want to do here is to show some practical situations of credit card use.
And follow up on the most appropriate behavior by considering two types of people: one who is on current finances and one who already has some credit card debt.
John and Carlo work at the same company and have similar positions. The salary is not high, neither has any ‘money’ left, but neither are they starving. They are very early in the month and have not yet received the salary! That is, they no longer have a lot of ‘cash’ in their pockets.
Both now have a credit card and another $ 100 in their wallet. And only! Let’s see how they do with daytime spending.
1. A day in the life of John, who has no money left but has a balanced budget
Friday, the day before Carnival, John wakes up in the morning and is soon ready for work. But when you make breakfast you realize that you have no bread. What to do?
Postponing payment by credit card
John decides to have coffee at the corner bakery. After all, it’s holiday eve and he’s up to date. When it comes time to pay, he uses his credit card. Since the card bill will only have to be paid next month, you don’t have to use the money for it: with the card, it can ‘postpone’ the current cash outlay.
John then goes to work, and when he gets there, what is his surprise when he learns it’s his boss’s birthday! Then there is the celebration lunch… and of course lunch is in a reasonably expensive restaurant. John enjoys the food, talks a lot with the chef and when it’s time to pay, John pulls the Credit Card again! If I had to use the money, I would probably have almost nothing in my pocket…
Leaving work, John remembers he needs to buy a gift for his daughter, who has just gone to college. He walks into a mall and looks for something quite meaningful to her, but without ostentation! When it comes time to pay, it finds that it can pay the credit card in six installments, without interest.
John returns home with a clear conscience and $ 100 in his pocket! He knows he spent a lot today, but spending is within budget. Now is to hold back spending a little until the end of the month.
2. A day in the life of Carlo, who already has credit card debt and can’t pay the full bill
Friday, Carnival Eve, Carlo wakes up in the morning and takes a while to get ready for work. But when you make breakfast you realize that you have no bread. What to do?
Better to improvise at home anyway
Carlo would like to have coffee at the corner bakery. After all, it is holiday eve. But since he already has debt… well, the ideal would be to spend nothing. He then prepares half of an instant noodle and as with some leftover rice from the day before.
It’s tough, but at least he still has $ 100 in his pocket!
Carlo then goes to work and getting there, which is not his surprise to learn that is the boss’s birthday! Then there is the celebration lunch… and of course lunch is in a reasonably expensive restaurant.
Carlo would love to go to lunch to socialize more with his boss. But he also knows he can’t spend a penny more… so he decides to make an excuse and go to lunch somewhere cheaper.
Installment payment? Better not even buy
Leaving work, John remembers he needs to buy a gift for his daughter, who has just gone to college. He walks into a mall and looks for something quite meaningful to her, but without ostentation! You know you couldn’t spend this money, but your daughter’s happiness is worth more than a debt.
Carlo then uses the $ 100 to pay the gift. Unfortunately, there is no cash discount. What to do?
Although he already has debts on the card, as he has already decided to spend, the best, under the circumstances, is to use the card to install the payment, but always looking to pay without interest. At the very least, it extends the payment of this expense a little further.
Carlo returns home with $ 100 in his pocket! At least he made decisions that led him to save money despite the sacrifice. If all goes well, in a short time he will pay off his debts and be able to lead John’s life!