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Don’t choke, Dave Ramsey…

January 11, 2011

but I’m really excited! I’ve been approved for and received my first credit card since my credit was virtually destroyed in my divorce.

I received a pre-screened offer of credit from Capital One and I logged onto the site with the hope and intent of being approved. And I now have this cute little ladybug credit card to call my very own.

I know, I know, I know…credit cards are the devil. But  here’s the thing: for a single parent who doesn’t yet have a large cash reserve, a credit card can mean the difference between working and not working, or being able to pay for an unplanned prescription medication, or something of the like.

There are a lot of personal finance gurus, bloggers, whathaveyou, that advocate the use of absolutely no credit.

I disagree with this. For several reasons.

In an ideal world, the average single parent would make enough money to not live paycheck to paycheck or worry about how bills will be paid or how to put food on the table. For these individuals, it is the unexpected expenses or catastrophes that may cause them to lose a job that provides their main source of income (ie; car needs repaired, illness).

In an ideal world, a credit score would not control our being approved to finance a vehicle, or the rates that we pay for insurance and other services, or in some cases whether we are offered a job with an income that could change the way we live. Unfortunately, though, it does and having no available credit on a credit record can be as detrimental as having a bad record.

That being said, I don’t think that a credit card is going to be my saving grace or ticket to the “good life”. A credit card gives me a little bit of security knowing that if E got sick and needed antibiotics and it was an off-pay week I would be able to float that money without asking for help or going to a predatory pay-day lender while I’m working to build up a cash emergency fund.

While I’m working on dropping cash into that emergency fund and even after it’s fully funded, I plan to keep a credit card to help rebuild my credit score.

It just makes sense for me.

And I’m genuinely excited that I have the opportunity to teach myself how to use one correctly this time.

Until then, Capital One Ladybug will be resting safely somewhere that is not my wallet.

What about you? Do you have credit cards? Do you want credit cards? What is your view on credit?

8 Comments leave one →
  1. January 13, 2011 11:43 am

    Credit cards can be the devil, but with responsible use they can be very useful. It is all about the decisions that go along with it’s use. You are absolutely right, until you are in a position where you don’t absolutely need one, credit cards can get you through a tough time. I think you are going to be fine having a credit card, you know how to use it. Good luck to you.

  2. Moia permalink
    January 12, 2011 11:31 am

    I have one credit card, had it since high school. It all boils down to the person using the card. If they are responsible then great if not they’ll have years of headache. I went on a credit card diet in September, which meant I didn’t use my card at all I focus on paying it off and I did. I’m now on a very strict budget and I pay cash for everything. I schedule appt. around pay day so I have cash for co-pay. My hubby thinks I’m obsessed with money but I’m truly obsessed with being DEBT-FREE by age 30. You sound like a very responsible young lady, all the best to you!

    • January 13, 2011 8:54 am

      Thank you for reading, and for your kind words! I think your goal to be debt-free by 30 is fabulous!

      Since my divorce we’ve been living a very ‘cash-only’ life. If we don’t have the cash, we don’t get it. Unfortunately, there have been situations where had I had a credit card things would have gone a lot smoother or I would have been able to avoid some crazy fees or taken advantage of some really good deals, but such is life.

      Now it’s time to take it to the next level and see how responsible I can be with this opportunity to handle credit.

  3. Steve permalink
    January 12, 2011 9:19 am

    I have 3 cards that I use… 1 debit and two credit. I use my debit card pretty regularly for my day to day purchases, and for years and years I was able to maintain a zero (or close to) balance on my credit cards. They were ALWAYS completely paid off within that month or the month after.

    Then, my wife and I separated and got a divorce. Without her income, I was forced to live above my means, as I couldn’t sell my house despite how hard I tried. Being in that bind, my options were either to put my necessities on credit or not pay bills and risk my credit score. I had to maintain that until I got a promotion at work, and that took about 8 months to obtain. In the meantime, I racked up nearly $6500 on that poor little credit card!

    Since the promotion, however, I have also gotten a roommate, and I’ve been able to needle down what is owed. It’s my hopes that by the time my tax return comes in (along with some extra hours I’m putting in), I’ll have that thing 50-75% paid off. Woot!!! I don’t plan on doing anything with my tax refund besides putting it towards already owed debt.

    My goal is to have that card paid off as soon as possible so I don’t have that tremendous weight of the balance hanging over my head. With chunking down that balance, that means I’m ALSO paying less interest and that’ll help snowball those payments faster too.

    Credit cards ARE the devil, in my opinion, however I think they can really save your butt like it did mine. Keep one on hand for life-emergencies as I did, and they can really help you weather the storm. The problem with them is that when it comes time that you have some cold hard cash in your hand and it’s not already allocated… what are you going to do with it? Spend it on something random and wanted yet unneeded, or go ahead and pay for something you’ve already purchased? Responsibility is what kicks in at this stage and that seems to be the hardest part.

    I wish you luck with your credit card! If YOU are responsible, then it can be a great benefit to you. If not, however, it can be quite the detriment.

    • January 13, 2011 8:49 am

      I also use my debit card for most of my expenses…I rarely have cash on me.
      Divorce can really throw you into a tailspin financially but it sounds to me that even though you were in a sticky situation you didn’t allow the credit card to become your master, which I applaud. You did what you had to do and now you’re doing what you have to do. With the extra hours at work it might be tough for a little while, but after that you’ll be on the upswing. Go you!

    • Steve permalink
      March 6, 2011 3:12 pm

      So… an update for the world to see.

      I didn’t do as I thought I had hoped and put ALL of my tax return towards the credit card. I picked up a laptop for myself that was on mega-sale for $380 @ Best Buy. I did, however, manage to put the rest towards the credit card and am now sitting on a balance of around $1700. That’s a HELL of a lot better than the $6800 it crept up to before I started working a re-donk-ulous amount of hours and getting back a sizable tax refund.

      Once this beast has been thoroughly crushed and under my feet, I plan on setting my sights on the car load. Watch out debt, because here I come!!

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