The Case Against Credit Cards


Attention soldiers! While on your journey to be a good steward, you are going to encounter resourceful allies and terrifying enemies. It’s important to know how to discern between friend and foe. People have come to accept credit cards as an ally. However, I’m here to tell you that credit cards have been an enemy hiding in plain sight for years. Have you ever heard the quote “A wolf in sheep’s clothing”? Below I make my case against credit cards and show how they are actually doing more damage to than helping you financially.

Credit Card State of the Union

I know what you’re thinking. Everyone has a credit card. Having one is a way of life. You need one to build your credit.

Bravo to the brilliant marketing the financial institutions incorporate into their branding. “What’s in your wallet?” “We treat you like you’d treat you.” “Don’t leave home without it.” All of these are very strategic, subliminal messages to make you think that you need a credit card to validate and/or accelerate your lifestyle. But the financial data tells a completely different story about credit cards. The amount of credit card debt plaguing the United States is sobering. According to a 2017 study by Nerdwallet, the total credit card debt racked up by Americans is now at an estimated $905 billion, an 8% increase from 2016. In that same study, it was found that the average household carrying credit card debt has a balance of $15,654. Still think credit cards are an ally? They appear to be pretty destructive to me.

Credit Cards Cause You to Spend More

Credit cards have led to these destructive trends to because they cause you to spend more. This has even been proven academically. In the early 2000s, McDonald’s was one of the first major food chains to accept credit cards. In a study by Dun & Bradstreet, they found that people spent 12-18% more when using credit cards instead of cash. McDonald’s reported that their average meal ticket was $7 when people used credit cards versus $4.50 for cash. In another study by Carnegie Mellon (and many other universities), researchers found that paying with cash causes the pain receptors in the brain to be triggered. However, when paying with credit, the brain ignored those same pain receptors. Their exact summary was that “credit cards effectively anesthetize (deprive of feeling or awareness) the pain of paying.” Yikes.

Still think these plastic budget drainers are worthwhile? Catch my next blog post for more on my case against credit cards.