Is a Credit Card Your Friend or Enemy?

That’s a big question and in my view, the credit card is your enemy. Let me explain why.

I’m speaking from personal experience. During my early career, between the ages of 20 to 30, I was trapped in the credit card cycle for nearly 10 years. Looking back, I can only imagine how much interest I paid to credit card companies and I only realised it much later.

How the Credit Card Trap Works

Let’s say you start spending on your credit card $10 here, $20 there, maybe $100 or $300. You earn reward points, which incentivise you to keep using the card. 

At the end of the month, you receive a bill, let’s say it’s $2,000. You manage to pay it off. Great.

But the following month, your spending continues and your new bill is $3,000. You manage to pay $2,000, leaving a balance of $1,000 unpaid.

Now here’s where the trap begins.

You’d think the credit card company would charge you interest only on the unpaid $1,000, but that’s not how it works. If you don’t pay the full balance, interest (often at 22.95%) applies to the entire amount, not just the unpaid portion.

This cycle continues. You may never catch up, especially if you only make the minimum payment. Even if one month you manage to pay it off in full, the next month you may be tempted again to buy a new TV, furniture, or other big-ticket items.

Before you know it, you’re back in the same situation. And it could take years to fully clear the debt, all while accumulating high interest.

What I Do Differently Now

My clear advice is this: A credit card is not your friend, it’s your financial enemy.

I’ve taken control by doing the following:

• I cut up all my credit cards, except one.

• The only card I keep is an American Express, but I use it only for international travel purposes (e.g., hotel bookings or rental car deposits).

• I never use it for day-to-day spending.

• Instead, I use a Visa debit card for all regular purchases.

• This ensures I only spend what I actually have no interest, no debt, no trap.

Final Thoughts

I’m not suggesting you shouldn’t have a credit card at all, in fact you may need one for:

• Booking international flights (to get free travel insurance)

• Hotel or car rental bookings (some providers require a credit card on file)

In such cases, keep one card with a low limit, and use it strictly for those purposes only. Avoid using it for everyday expenses.

Take control of your money. Avoid the debt cycle. Use a debit card — and use credit cards only with extreme caution. If you want to get ahead financially, this simple change can make a huge difference.