151: Credit Card Mistakes
Digest
This episode of the Money Love Podcast, hosted by Money Coach Page Pritchard, delves into the common mistakes people make with credit cards. Page emphasizes that credit cards are neutral tools, not moral sins, and encourages listeners to consider their financial goals and how credit cards fit into their strategy. She highlights the importance of viewing credit cards as tools, not free money, and stresses the need to track spending and ensure you have the funds to pay off the balance in full. Page also addresses the credit card float, overutilization, 0% balance transfers, and the importance of negotiating with credit card companies. She provides practical tips and strategies for using credit cards responsibly, including paying off the statement balance within the grace period to avoid interest charges and keeping utilization below 30% to maintain a healthy credit score. The episode concludes with a reminder about Page's upcoming four-day live workshop, "Unburdened," designed to help individuals overcome debt and achieve financial freedom.
Outlines
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Introduction
This Chapter introduces the Money Love Podcast and its host, Page Pritchard, a Money Coach who helps people transform their relationship with money. The episode focuses on credit card mistakes and how to use credit cards as a financial tool to benefit your finances.
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Credit Card Mistakes
This Chapter dives into the 10 biggest credit card mistakes Page sees people making. She emphasizes that credit cards are neutral tools and that responsible use can benefit your finances and credit score. Page encourages listeners to view credit cards as tools, not free money, and stresses the need to track spending and ensure you have the funds to pay off the balance in full.
![](https://s3.castbox.fm/webstatic/images/book.5d108c35.png)
Unburdened Workshop
This Chapter is a reminder about Page's upcoming four-day live workshop, "Unburdened," designed to help individuals overcome debt and achieve financial freedom. The workshop starts on June 11th and costs $29, providing access to the workshop, workbook, and lifetime access to the content.
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Credit Card Mistakes: Viewing Credit Cards as Moral
This Chapter explores the first credit card mistake: viewing credit cards as a moral issue. Page argues that credit cards are neutral tools and that using them doesn't reflect a person's character or intelligence. She encourages listeners to detach morality from credit cards and view them as a tool in their financial toolbox.
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Credit Card Mistakes: Not Defining Your Credit Card Use Spectrum
This Chapter discusses the second credit card mistake: not defining your credit card use spectrum. Page emphasizes the importance of deciding how credit cards will fit into your financial goals, whether you choose to use them strategically, minimally, or not at all.
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Credit Card Mistakes: Viewing Credit Cards as Free Money
This Chapter addresses the third credit card mistake: viewing credit cards as free money. Page clarifies that credit cards are loans from banks and that using them requires repayment with interest. She advises listeners to avoid using credit cards if they struggle with viewing them as free money.
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Credit Card Mistakes: Using Credit Cards While in Debt
This Chapter explores the fourth credit card mistake: using credit cards while in revolving debt. Page advises against using credit cards until you've gotten a handle on your debt, as it can hinder progress and create a sense of taking two steps forward and one step back.
Keywords
Credit Card Mistakes
This refers to common errors people make when using credit cards, potentially leading to financial difficulties and a negative impact on their credit score. The episode discusses 10 specific mistakes, including viewing credit cards as free money, not tracking spending, and overutilizing credit.
Money Love Podcast
This is a podcast hosted by Page Pritchard, a Money Coach, focusing on helping people improve their relationship with money. The podcast covers various financial topics, including budgeting, debt management, and investing, with a focus on mindset and emotional well-being.
Credit Card Float
This refers to a situation where someone relies on their credit card to cover expenses between paychecks, essentially living paycheck to paycheck. This can lead to a cycle of debt and hinder financial progress.
Credit Utilization
This refers to the percentage of your available credit limit that you are currently using. It is a significant factor in your credit score, with a higher utilization generally indicating a higher risk to lenders.
0% Balance Transfer
This is a credit card feature that allows you to transfer a balance from another credit card to a new card with a 0% interest rate for a specific period. This can be beneficial for saving money on interest, but it's crucial to use it strategically and have a plan to pay off the balance before the promotional period ends.
YNAB (You Need a Budget)
This is a popular budgeting software that helps users track their spending, allocate funds for specific goals, and manage their finances effectively. Page recommends YNAB as a tool for responsible credit card use, as it helps track spending and ensure you have the funds to pay off the balance in full.
Unburdened Workshop
This is a four-day live workshop hosted by Page Pritchard, designed to help individuals overcome debt and achieve financial freedom. The workshop covers topics like debt management, mindset shifts, and creating an action plan for debt repayment.
Page Pritchard
Page Pritchard is a Money Coach and the host of the Money Love Podcast. She specializes in helping women overcome overspending, manage their finances, and achieve financial goals.
Q&A
What are the 10 biggest credit card mistakes Page Pritchard identifies in this episode?
The 10 biggest credit card mistakes Page identifies are: 1) Viewing credit cards as a moral issue, 2) Not defining your credit card use spectrum, 3) Viewing credit cards as free money, 4) Using credit cards while in debt, 5) Not tracking credit card spending, 6) Being in the credit card float without realizing it, 7) Overutilizing credit cards, 8) Thinking you need to pay interest to show credit card use, 9) Using 0% balance transfers incorrectly, and 10) Not knowing that most things with your credit card are negotiable.
How can I use credit cards responsibly to benefit my finances and credit score?
To use credit cards responsibly, Page recommends viewing them as tools, not free money, tracking your spending, ensuring you have the funds to pay off the balance in full, keeping your utilization below 30%, and paying off the statement balance within the grace period to avoid interest charges. She also encourages negotiating with credit card companies to potentially lower interest rates, waive late fees, or adjust payment dates.
What is the credit card float and how can I avoid it?
The credit card float is when you rely on your credit card to cover expenses between paychecks, essentially living paycheck to paycheck. To avoid the credit card float, Page suggests ensuring you have enough money in your checking account to pay off your credit card balance in full and cover all expenses until your next paycheck.
What is credit utilization and how does it impact my credit score?
Credit utilization is the percentage of your available credit limit that you are currently using. It is a significant factor in your credit score, with a higher utilization generally indicating a higher risk to lenders. Aim to keep your utilization below 30% and ideally around 10% for a positive impact on your credit score.
What are 0% balance transfers and how can I use them effectively?
0% balance transfers allow you to transfer a balance from another credit card to a new card with a 0% interest rate for a specific period. This can be beneficial for saving money on interest, but it's crucial to use it strategically and have a plan to pay off the balance before the promotional period ends. Avoid using them as a bandaid solution to avoid dealing with debt.
What is the Unburdened Workshop and how can I participate?
The Unburdened Workshop is a four-day live workshop hosted by Page Pritchard, designed to help individuals overcome debt and achieve financial freedom. The workshop starts on June 11th and costs $29, providing access to the workshop, workbook, and lifetime access to the content. You can save your spot by visiting overcomingoverspending.com/debt.
Show Notes
Credit cards are a tool that you get to decide if you're going to use on your financial journey. Whether or not you will use them will depend on what you're trying build, and how confident you feel in your ability to ues them well. If you do decide to use credit cards moving forward, it's important that you're using them in a way that will help you, rather than hurt you. When used correctly, credit cards can provide incredible perks while also helping you build credit. When used incorrectly, they can cause disasterous consequences with your money and credit score.
Whether you're using credit cards correctly or incorrectly can usually be boiled down to ten common mistakes that I see credit card users making. On this week's episode of The Money Love Podcast I will be walking you through each of these 10 mistakes. By the end of the episode you will be able to pinpoint if you're making any of these credit card mistakes and be armed with adjustments you can make to ensure you're no longer making them. Make sure you join us next week (Tuesday, June 11th - Friday, June 14th) for our Unburdened 4-day live debt workshop, using the link below. Enjoy!
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