Should You Have a Credit Card?

You’ve seen it portrayed in TV shows and movies: The shopaholic has to cut up, burn, or put their credit cards into a block of ice to keep from falling into further debt. Credit cards are typically viewed as either an evil ploy to get you to spend money you don’t have or a tool to prove that you are financially responsible. With the potential to both help and hurt you, the question is: Should you have a credit card?

It’s true that credit cards can land you in a world of trouble if you aren’t careful, but that doesn’t mean that you shouldn’t use them at all. To help you figure out if owning a credit card is a smart financial decision for you, we’ve got some financial principles you should consider.

If any of these five statements don’t describe you, you might want to think twice before you get a credit card:

#1: You have a budget and stick to it.

Setting a budget that accounts for your monthly expenses, investments, and necessities is a sure-tell sign of someone that is aware of what they can afford to spend. The problem with credit cards is that you won’t get a notification when your account is running low; all you get is a bill the next month (and potentially a heavy dose of sticker shock). It can be really easy to overspend if you don’t know what funds are earmarked for your necessities like bills or groceries. If you have a set budget that covers your expenses, and you know how much you have “leftover” each month, then you have a good foundation in place to handle a credit card responsibly.

#2: You only buy what you can afford.

This is our golden rule of credit cards and is where we see most people get into trouble. If you have a tendency to use credit cards to purchase items or trips that you otherwise couldn’t afford, then it’s time to break out the scissors or avoid getting a credit card in the first place. Credit cards tend to come with a “buy it now and worry about paying it later” mentality that can be dangerous. A good rule of thumb is this: If you can’t pay for it in cash today, then you shouldn’t put it on your credit card.

#3: You make purchasing decisions based on facts, not feelings.

Any transaction that is strictly informed by feelings (like BOGO deals, Black Friday offers, fear that you won’t be able to purchase something later, or a purchase in the name of “retail therapy”) are all examples of emotional buying. Someone that is ready for a credit card generally makes purchasing decisions based on facts and not on feelings. Emotions drive bad financial decisions because emotions don’t differentiate between a need and a want.

#4: You can pay off your balance each month.

Being able to pay off your credit card balance each month means that you know exactly how much you spent and you already have a plan to pay it off at the end of each month (or right after you make a purchase!). A good way to do this is by only using a credit card to purchase things that are already in your budget, like groceries, gas, and bills. This is a smart way to still build up your credit and get rewards or points for your purchases without risking overspending.

#5: You are not living paycheck to paycheck.

If you are living paycheck to paycheck, there is no shame in that. Actually, 58% of Americans are living paycheck to paycheck.1 However, if you are in a position where you only have enough to pay your essentials, a credit card is a strong temptation to live outside of your current means. And while a credit card may be tempting to get some wiggle room in your budget, you’ll end up paying more in the long run when you can’t pay that money back. If you are in a position where some extra money will help you get on top of your finances, spending on a credit card isn’t your best course of action. Our team would be happy to discuss some other options if you are looking for a financial plan that approaches your current situation strategically.

There’s no doubt that a credit card can be a powerful tool to help you build credit and earn points or rewards. However, if you are struggling in any of these five areas, we would recommend staying away from credit cards so you don’t fall into the financial debt credit cards can lead you into. If you have good principles guiding your financial decisions, a credit card is just another tool in your financial belt that can be a real asset to you.

Curious about the strength of your financial plan overall? Consider scheduling a complimentary one-on-one consultation with one of our financial advisors here at 210 Financial. We would love to talk with you!


210 Financial is more than just numbers. The “210” in our name stands for a childhood home that represented safety, love, and family. That is what we want to provide for everyone that we care for. Welcome home. Welcome to 210.

Investment advisory services made available through AE Wealth Management, LLC (AEWM). AEWM and 210 Financial are not affiliated companies. 1421701 – 7/22

Content prepared by Savage Content Collective


  1. Dickler, J. (2022, June 27). 58% of Americans are living paycheck to paycheck after inflation spike – including 30% of those earning $250,000 or more. CNBC. Retrieved August 11, 2022, from

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