Welcome to the Making Margin podcast! Greenway’s team is here to discuss common financial mistakes and to help you navigate them. 

Meet the voices behind Making Margin:

• Nick
• Allie  
• Jeff

Today’s topic is credit cards. Should you use them? How should they be used? Do they lead to excessive spending and impulse buys?

• As of February, Americans have over $4 trillion in consumer debt
• The average American has a credit card balance of $4,293, according to the latest Experian data.
• At the same time, credit card interest rates have never been higher. The average card interest rate is currently 17.41 percent, according to CreditCards.com’s latest report. That’s up from 16.15 percent one year earlier and 15.22 percent two years ago.
• Studies have suggested that people spend 12-18% more when they use credit cards instead of cash
• McDonald’s reported that the average ticket is $7 when people use credit cards, $4.50 for cash.

Discussion topics:

• There is nothing inherently wrong with credit cards, but they may lead to impulse buying, which can often lead to discontentment. 
• This doesn’t necessarily mean that you are unhappy with your purchase, but usually that purchase takes money away from an area that would have added more value to your life. Little things can quickly add up to big money.
• Internet buying makes impulse buying/over spending that much easier. One click versus the hassle of getting to a store.
• One tip to help with this is to not store your credit card data on any sites; sometimes having to enter it is too much of a burden.

Take Away:

Choose your credit cards wisely and pay them off each month. If used in this way then they can be a great tool for free money, assuming you can control your spending.

Resources:

Greenway’s Spending Plan

Greenway’s Goal Setting Workbook