Why I Hate Owing Money (and Why You Should Too)

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Most people know this, but I’ll say it anyway: to truly benefit from rewards credit cards, you need to pay your credit card bill every month and never carry a balance. If you carry a balance from month to month, you’ll inevitably pay interest on your credit card balances. Over time, this interest will effectively cancel out any rewards you earn.

Take my favorite rewards credit card, for example. Signing up for the Chase Sapphire Preferred card lets you earn 50,000 points worth $625 in travel after you use your card for $4,000 in purchases within three months of account opening. But – and this is a BIG BUT – it has a 16.99%–23.99% variable APR.

That kinda interest will chew up and spit out any rewards you earn, effectively making your rewards scheme worse than pointless because the rewards will cost you money.

4 Reasons I Hate Debt

But there are other reasons to be debt-averse that extend beyond this hobby. Here are a few, plus why you should avoid debt at all costs.

#1: Taking on debt is the same as borrowing from your future self.

Debt may make your life easier today, but the feeling is almost always short-lived. When you take on debt, you’re effectively borrowing from your future self.

This means your future self has to work harder and longer to achieve the same financial goals.

#2: Debt is a slippery slope.

One thing I hate about debt – and credit card debt in particular – is just how easy it is for people to let it spiral out of control. It may not be a big deal to rack up a credit card bill at first, but it’s easy to forget to keep track until, all of a sudden, you owe thousands of dollars.

Keep in mind that the average indebted household owes more than $16,000 on their credit cards. For many people, this happened gradually without them realizing what was happening.

#3: Debt leaves less money for fun.

Owing money today and in the future means you have less money left over for fun, travel, and life experiences! Having debt could mean the difference between taking a once-in-a-lifetime trip or having to stay home.

#4: Debt makes it harder to achieve your goals.

Obviously, having debt also makes it harder to achieve financial goals. You’ll have less money to save for retirement, your children’s college education, and travel. Because you owe money on your credit cards and other debts, every dollar you earn is partially spoken for by somebody else.

The Bottom Line

If you’re pursuing travel rewards in order to afford the travel you want, you should absolutely avoid debt like the plague. But even if you’re not, debt can still ruin your life.

The best step for all of us is to only use credit when we need it or when we’re earning rewards and to remain steadfast in our dedication to never carry a balance.

Travel is fun, but credit cards can be a slippery slope for some people. Treat credit responsibly and avoid debt, and you’ll be a lot better off.

Why do you hate debt? Do you ever carry a balance?

Holly Johnson is a financial expert and award-winning writer whose obsession with frugality, budgeting, and travel plays a central role in her work. In addition to serving as Contributing Editor for The Simple Dollar, Holly writes for inspiring…
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Chase Sapphire Preferred® Card

  • Annual Fee: $95 fee waived for the first year
  • Foreign Fees: No
  • Card Type: Bank

Apply Now
Add to Favorites

  • Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That’s $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named Best Credit Card for Flexible Travel Redemption – Kiplinger’s Personal Finance, July 2016
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions – as long as there’s a seat on the flight, you can book it through Chase Ultimate Rewards

Breakdown

Earn (pt.)

Spend


First 3 months

50,000

$4,000


Travel Purchases

2.00

$1


Restaurants Purchases

2.00

$1


Coffee Shops Purchases

2.00

$1


Fast Food Purchases

2.00

$1


Alcohol & Bars Purchases

2.00

$1


All Purchases

1.00

$1


Chase Sapphire Preferred® Card

  • Annual Fee: $95 fee waived for the first year
  • Foreign Fees: No
  • Card Type: Bank
FTG Review Reward Breakdown Points Breakdown
  • Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That’s $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named Best Credit Card for Flexible Travel Redemption – Kiplinger’s Personal Finance, July 2016
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions – as long as there’s a seat on the flight, you can book it through Chase Ultimate Rewards

Breakdown

Earn (pt.)

Spend


First 3 months

50,000

$4,000


Travel Purchases

2.00

$1


Restaurants Purchases

2.00

$1


Coffee Shops Purchases

2.00

$1


Fast Food Purchases

2.00

$1


Alcohol & Bars Purchases

2.00

$1


All Purchases

1.00

$1


Apply Now

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