Here’s a Quick Way to Deal With The Biggest Problem With a Credit

The following is a guest post from Martin of Studenomics and Passive Income Now. He’s finishing up his first guide that will show 20-somethings how to conquer credit for once and for all. He wants young people to be able to live life on their own terms without being stuck in debt.

“Credit is a system whereby a person who can’t pay gets another person who can’t pay to guarantee that he can pay.” — Charles Dickens.

I must confess that the past three years I’ve been running my blog off some crappy laptop I bought for $500 in 2008. My laptop finally died on me recently. Normally this wouldn’t be too big of a deal. The reason that it was a colossal problem was that I was in Budapest, Hungary, a country where I don’t speak the language. Did I mention that I earn most of my income off the internet? Yep it totally sucked. I lost my most important files and was worried about how I would access the internet for the duration of the trip. I thought that my life was over.

Sure I could still enjoy cheap drinks and great company. How would I blog without a laptop though?

Then I found a solution. I realized that there was an Apple store in town. Long story short is that I ended up picking up the MacBook Air, a piece of technology that I had fawned over since I first saw it in the store a long time ago.

Now it’s time to finally answer the question in the title. What’s the biggest problem with a credit card?

A credit card will let you buy anything that you want without asking any questions.

Thankfully I had the money in my savings account waiting to be transferred over. If I didn’t have a decent savings account I would’ve been totally screwed. I would’ve been screwed over because my credit card doesn’t ask questions. I bought my Macbook Air without much thought put into it.

That’s not a very wise decision for a personal finance blogger. A personal finance blogger buying a a brand new laptop without planning for it? I’m pretty sure that’s a sin.

Before I go on with this article I want you to know that I’m not one of those anti-credit dudes. I’ve actually been using a credit card since I was 18 and it helped me build my credit to the point that I got a home mortgage at 21. I do believe that there are many issues that need to be resolved when it comes to credit cards and 20-somethings.

If you have a credit card I’m 100% positive that you experienced this before. Your credit card will never ask you any questions. You don’t have to ask for permission. Your credit card won’t ask you if you have the money to pay for this. The store associate won’t ask you how long it’s going to take you to pay off your credit card balance. There are no questions asked. As long as you stay below your credit limit you can have anything that your heart desires.

You can have anything that you want without having to answer any questions.

What’s my solution for this problem? What’s my quick way for dealing with the biggest problem with a credit card?

Before every purchase that you make with your credit card ask yourself the following questions:

1. Do I really need this right now? Can I wait another few weeks to make this purchase?

2. How will I pay for this?

I guarantee you that just the time that it takes you to remember these questions will be enough to start second guessing yourself. Once you ask yourself the questions that your credit card won’t ask, you’ll realize that you’re making the wrong choice. You might even realize that you have other stuff you would much rather save up for. I personally try to save all of my money for trips. Going out in town or buying a new pair of shoes is alright. Going on a trip a few times per year, well, that’s how I want to live life for the next little while.

Have you experienced this with a credit card? Have you ever gotten carried away just because your credit card doesn’t ask you any questions?


  1. This was a wonderful way of putting it, it doesn’t ask you any questions. Most credit cards are happy to let you increase your limit or even go overlimit too as long as you make the minimum payments regularly. I have had this (maxing out on my credit) happen to me twice over, and the first time it happened, it took me over a year to get it beaten. Within a short while it happened again, but this time it was more due to emergencies that I could not meet with the money available to me. Credit cards are good for emergencies and big ticket purchases where you cannot write a check only. For everything else, it lulls you into a sense of security and basically eats into your future earnings.

  2. Funny story, I show at Wal-Mart pretty often so I wanted to try an experiment. I wanted to get the WM credit card so that I could track how much money I spent on chicken per month. I applied for the cc and on the spot I was given a $4,000 limit! I could’ve had anything for four grand. Isn’t that crazy?

  3. Emergencies. Can’t live with ’em, can’t live without them. You cannot hide from them, they always find you. Even worse if your name is Murphy. Unfortunately, we have fallen into society’s response to react to emergencies, rather than plan for them. There IS a solution however. Not only does the “Emergency Fund” approach plan and handle the unforseen events- the peace of mind that comes with knowing that life can happen and I’m prepared is an awesome feeling. My experiences tell me using a credit card is O.K.- ONLY if you have the this type of fund to back it up. If not – look out. (Disclosure- My life has been forever changed as an Alumni of DR’s FPU). The discipline required to approach one’s finances in this manner has to be re-instilled into our culture. Spending money we have not earned without always a plan to repay is not only a losing proposition- its become the rule rather than the exception. CSN&Y had song so aptly titled- “Teach your children”.

    • I’m w/you Murph. I followed society’s suggestions and ended up w/2 car loans and 4 credit cards ($52k in the hole) when we bought our house. Then I heard about DR. His $1k (starting) emergency fund plan has kept me from using a credit card for an “emergency” for 3 yrs now. And Dave is right … there has not been an “emergency” that the $1k couldn’t cover (root canal, new baby, new garage door, new computer {husband’s business runs off Internet, old computer was 7 yrs old}). With each emergency, we were able to take our time researching and negotiated better prices with that info. We saved money b/c we had a plan and we could negotiate from a cash position. We are down to 1 debt (besides the house). We have changed our family tree.

  4. I actually tend to have the opposite problem. If I am carrying cash I know that I have the money to spend because it’s right there in my hand. I have a hard time remembering that I withdrew it for a specific reason and maybe hadn’t needed all of it for that, but that it isn’t necessarily money that I can spend on anything. Knowing that I CAN spend the cash doesn’t remind me to question whether I SHOULD spend it. I actually think about it a lot more with credit cards. I have two cards, and use one for necessities like groceries and gas and one for discretionary spending. That way I have to think about the purchase before I even know which card to pull out, and then I think about whether I have the money in my checking account to pay the bill and how it will affect my monthly budget.

  5. “A personal finance blogger buying a a brand new laptop without planning for it? I’m pretty sure that’s a sin…”

    Ok, I can’t agree with this. You did not commit a sin, you run a technology company in that you make money off the web. Your article starts off by saying you run your site from your older, limited technology so clearly you are not only frugal with money but technology and for that I applaud you. I don’t think you committed a sin but rather did exactly what your savings account was meant to do. Save you. Save you a headache, heart ache, technology ache.

    Yep, I get you wold rather travel with your money so make yourself feel better and name your laptop ‘igo’ and think of all the new places you will go and things you will see.