Message from Montie

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Financial advice, credit cards over debit cards discussed in Essence magazine

Message from Montie

Shamontiel is the author of two novels: "Change for a Twenty" and "Round Trip." Check her out at


Cover of November 2009 edition

The November 2009 edition of Essence magazine is filled with excellent information, including a heartfelt conversation about black hair with actress Nia Long, the scoop on Chris Rock's "Good Hair" film, some black mens' perspectives on President Barack Obama and funny stories about brothers' worst sexual experience. In fact, this issue is one of the best issues I've ever seen from Essence magazine, and I'm always happy to check out the latest edition. And the financial section was useful, minus one piece of advice. One person suggested switching from debit to credit cards. That had to be the worst advice I've ever read on how to handle your finances.


The rationale behind switching from debit to credit cards was that debit cards don't offer consumer protection on purchases and the overdraft fees can cost more than the monthly interest. The idea of using credit cards over debit cards was for people to build their credit by making all purchases with the plastic and then paying it off in full each month. Of course this does help your credit score, but too many people simply don't have the discipline to stop spending or the money to pay the balance off in full. This tip ended by stating that if you know you can't pay your monthly balance then stick to cash.

Stick with money, not with plastic

From the perspective of someone who has pretty good credit, I agree with using cash. My father is a banker and my mother works at a credit union, so I got lectures on good credit as soon as I could comprehend what good credit meant. And I can only recall one time being called about a late payment on anything, and that was because I didn't get the online alert that a payment was due.


But one thing I regret doing was opening up a credit card account. After having a balance of $16,249.19 in credit card debt, I finally got fed up and started cutting up cards. Here was my problem. Retail stores constantly offer money off just for opening an account. I used to open up store credit card accounts just to get the 15 percent and 20 percent discounts, but once you have a credit card, you see items you want that you wouldn't dare buy if the money had to come from a debit card or from the cash in your purse. Then I opened a couple of Visa accounts and started spending money on items that were important to me at the moment but not imperative later down the road. The arrogance of feeling like you can pay it back later makes everybody feel like they're rich. This is how credit card debt goes. In my case, about 75 percent of my debt was paying for graduate school trying to avoid student loans, computer repairs and upgrades, and paying for car repairs so the transactions were reasonable. However, I still wish I would've waited for the next paycheck instead of handing over credit cards. 


If a credit card is used for emergency purposes, it makes sense to have one. And we always say it's for emergency purposes until we see that pair of new shoes or new video game. Then that word "emergency" slips our brains. Credit cards are an excellent way to build credit. I think they're important. But I think unless you have the self-discipline to be able to take care of your finances with a credit card, keep shredding those credit card offers. I completely disagree with this financial advice to use credit cards. After cutting up and closing a few accounts and making a financial plan to pay everybody back (I'm still working on that, by the way), I started spending within my means. I stopped buying things I had no business buying by forcing myself to use a debit card. If I didn't have the money for it, then I didn't need it. Due to President Obama's strict rules about credit card companies being more open and informing the credit card owners of what they owe instead of putting the percentage rates in fine print at the bottom, people are starting to pay attention.


Word of advice: Stick to cash or debit cards. Find banks and credit unions that will give you discounts for using your debit cards at certain locations or you can accrue reward points for paying a certain amount back or spending at certain stores. This way, you both win. You get your discounts and don't end up owing any money.



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