Those famous words are spoken every time someone pulls a card out of their wallet to pay for a purchase. With us, it has always been credit.
Until Willow had a bad spell of being sick last spring, it was never an issue paying the card balance off every month. After 3 overnight emergency room visits and two weeks in critical care, not only was the rest of our emergency fund drained, but we couldn’t pay off the card balance.
We’ve still kept using the card, as the interest rate isn’t very high at all. We pay off what we spent each month then all the extra we think we can afford.
My thoughts have now turned to not using the credit card any longer, but using the debit card. At least not until we pay off the credit card balance. Our bank offers the same protection on our debit card as is on our credit card so unauthorised usage would not be an issue.
I feel using the debit card would make us think twice or even three times about spending any money. There is no way we would want to over draw the bank account.
I know what we need to cover the bills each month, including a payment on the credit card, so everything above that amount is ‘eligible’ to spend or save.
Scuba Man is none to keen on this idea. He feels more secure in using the credit card and making sure we keep paying as we are. That way, if we need to, we wouldn’t have to pay for everything immediately if we had cash flow problems.
I, however, want to save the credit card for the issue of a cash flow problem, or another true emergency. I hate being in debt!
I face indecision. Given my income will stop soon, I am not sure how to handle it.
Is it better to use the debit card and pay down the credit card to nothing? This would save us money we pay in interest.
Or, is it best to continue using the credit card and just paying a set amount every month, banking everything else to make sure we don’t run out of cash for things like mortgage payments?
Or is it better to continue to use the credit card and not worry about a purchase draining the bank account because one or both of us hasn’t kept track of what we need for the bills? Would this lead to us not paying enough attention to what we are spending as we are spending?
I need your opinions and some guidance here folks. What has worked for you? Which way would be best to handle the transition to just one income, even if it is only temporary? Can this situation be handled without adding to the amount being carried on the credit card? Decisions…decisions…