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Want to know why you're already in credit card debt? Here are ten lies you've probably listened to. (I know I did!)

Having graduated college with a massive amount of student loan debt, I can tell you how much debt sucks. Depending on the amount, debt can be either a nuisance that you know will be paid off quickly or a debilitating emotional experience that takes a lifetime to rid yourself of. Credit cards, when used improperly, can create both of those kinds of experiences.

Often when you’re making credit card purchases, you aren’t thinking about the future. What you need is right in front of you, and the payments you need to make are not. Below you will find 10 often-used rationalizations for credit card debt. Avoid them at all costs unless an absolute emergency requires you to break out a high-interest card. In fact, let’s start there.

10 Credit Card Debt LIES

1. It’s an emergency!

Often we go into debt by convincing ourselves that we have an emergency. Certainly, there are times when a true emergency arises. A good example of a real crisis is medical expenses. But many times what we call an emergency isn’t really an emergency. Whether it’s a second car that needs repair, or even our child’s college education, we can often go without addressing what at first seems like an urgent expense. If life or liberty isn’t at stake, it’s probably not a true emergency.

For a true emergency, paying with plastic when you don’t have emergency savings makes sense. For anything else, exhaust all other viable alternatives first.

2. We deserve it

This one has snagged me more than once. After working so hard to save money and spend wisely, sometimes we let our guard down under the guise of a reward. Perhaps you’ve had a hard week at work, and spending $150 on a fancy dinner that you can’t really afford seems like something you’ve earned. The problem is that it’s like taking one step forward and two steps back. The “reward” just digs you deeper and deeper into debt.

We all need a break now and again. But if you are fighting against credit card debt, don’t go into more debt as a reward. Find some other way to reward yourself– one that doesn’t make your financial problems more severe!

3. It’s a bargain

Bargains are great, but you shouldn’t use them as an excuse to spend more than you have. You also shouldn’t use great deals to spend money on more than you need. The one thing I’ve learned is that great deals generally come and go pretty regularly. Regardless, it’s not a great deal if you spend a ton of money on credit card interest paying off the debt over months or even years.

My wife always boasts of the cash back she earns through Ebates. And she’s especially attracted to stores when the amount of cash back is tripled for a limited time. She’s literally spending money to make money, and it drives me crazy! Unless you actually need to spend that money in the first place, this strategy just doesn’t make sense.

4. It’s not much money

It’s so easy to spend money we don’t have if we spend it in small amounts. Here’s a factoid: a few years ago, a federal stimulus bill sent out stimulus payments to taxpayers who qualified. Under the stimulus plan, payments were not sent in lump sum checks. Instead, those taxpayers saw their take-home pay increased each month by about $7 to $13. Why? Because we are more likely to spend an extra $10 or so each month than we are to spend a lump sum $400 to $800.

The same is true with “small” credit card debt. Enough “small” charges on the card over time can grow into a mountain of debt. If you’re fighting your way out of credit card debt, there is no such thing as a small credit card charge.

5. The payment is small

Let’s be honest. How many have justified a purchase based on the monthly cost? We all do that when we buy a home, asking ourselves if we can afford the payments. But with credit cards, it can be a real problem. Because most cards calculate the monthly payment at about two percent of the outstanding balance, payments are extremely small compared to the amount owed.

For example, you can nab a $1,000 TV and “only” pay about $20 to $30 a month for it. Perhaps more than any other factor, small credit card payments have caused financial turmoil for many consumers. Remember, the payment may be small and manageable at first. But buy enough on credit, and the payments grow substantially. On top of that, you still have to pay back the borrowed amount with interest. On that example above, making only the minimum payment can result in interest over $3,000. So you’re paying $4,000 for a $1,000 TV. That makes sense, right?

6. The card rewards make it worth it

My family takes advantage of many travel reward credit card offers and cash back rewards. But if the allure of these awards is putting you deeper and deeper into debt, they just aren’t worth it. If you pay off your card each month, the rewards are great. But if you don’t, stay away from them. In fact, if the rewards are tempting you into credit card debt, get a card without rewards or just use your debit card.

This is very similar to lie number three. Spending money because the rewards or rebate is good is a lousy option. Going into more debt for these rewards is even lousier.

7. 0% APR on purchases

0 APR and low interest credit cards can be like a drug dealer giving away his product for free–at first. Once you’re hooked, prices go up–way up. In the case of credit cards, once the 0% APR introductory rate expires, interest rates can easily soar into the double digits. To avoid this, I’ve often turned down zero percent APR deals, particularly those offered by furniture stores and other retailers. If you are going to use a 0% APR deal on purchases, make sure you can pay off the balance in full before the offer expires.

8. 0% APR on balance transfers

You can save a lot of money using great balance transfer offers if you’re already in debt. We transferred home equity debt from a home remodel to 0% APR cards and have saved literally thousands of dollars in interest. But we also make sure to pay off the balance transfer before the 0% APR rate expires. We also make sure not to use the card for anything else while we still have a balance on the transfer deal.

Balance transfer offers can be great, but just like 0% APR purchase offers, make sure you can pay off the debt before the offer expires.

9. It’s for my business

A business credit card, particularly for small companies, can serve many important roles. Employees can use business cards to easily track their expenses. They can also help keep your business expenses separate from personal expenses, which is particularly important at tax time. But like all credit cards, business cards can also cause you to spend more than you should. With businesses, it’s easy to justify any arbitrary expense as necessary.  All small business owners have to decide for themselves, of course, just how necessary an expense is, but with business credit cards, it can be easy to spend more than you should.

10. I’ll pay it off after graduation

This is perhaps the most insidious credit card lie of all. Study after study shows that the outstanding credit card balance for college students increases as they near graduation. There are a lot of reasons for this, but one reason is that they convince themselves that they can handle the debt once they graduate and get a job. The problem is that they start out in the workforce already in the hole.

Credit card debt of $10,000 or more is not uncommon for college graduates. Add to that school loans, and debt can be overwhelming even before they get started. So if you are a high school or college student, avoid revolving credit card debt like the plague.

Author Bio

Total Articles: 158
After amassing more than $255,000 in debt on a math degree from the University of Miami, Michael now enjoys spending time at home and writing about personal finance.

Article comments

Craig says:

I always fall to the I deserve it problem. I may be out and have no interest in buying something, then quickly find something that grabs me and I’ll say I deserve it, it’s just one item. Well those can add up.

Trevor @ FN says:

Great post. And, no, just because it’s a bargain doesn’t mean that you need to buy it! Great points!

tom says:

Some of those points are funny, especially number 10. But did you mean to say student loans not credit cards, because I don’t think students use credit cards to pay for tuition.

I know the interest goes up huge after they graduate but thats on a student loan though.

Also, assuming they will pay it off later never works, because now you are done school, you are buying a car, a new job, and maybe even a new place, so you have additional expenses and lets not forget to factor in the unexpected costs.


Very well written.. Truly agree that most of credit card debt is our own creation…

Rick says:

11. Pretending that 0% credit card debt is not credit card debt

DR says:

Rick, I’m not sure I understand your comment. In some cases, we take advantage of 0% offers, put the money in a savings account, and earn the interest rate spread. We then pay off the card before the intro rate expires. Is this credit card debt? Well of course it is, but not in the way most people think of credit card debt.

MoneyEnergy says:

I know I’ve fallen prey to #4, buying it because it’s cheap or a small amount – makes you feel like it’s easy to pay off, but all those $3.00 purchases really add up. Also, love the point about “The one thing I’ve learned is that great deals generally come and go pretty regularly.” I don’t generally shop for shopping’s sake, but it’s easy to see how the deal will pull people in. I think this is a great reminder that there will always be “deals”!