When people talk about money problems, they invariably end up complaining about the number of bills they need to pay. When they start listing them all, it's not uncommon for the list to include ‘credit card'. But is ‘credit card' really a ‘bill'?

I find it really hard to comprehend that anyone could honestly think it is!


Well, bills are repeating services that you pay for. Things like:

  • Insurance

  • Telephone

  • Electricity

  • Rates

  • Registration

  • Internet connection

  • Car servicing

...and so on.

For most people, ‘credit card' does NOT fit into that list!

Sue, if you use your credit card to pay your rates, electricity, telephone, insurance, etc. and then refer to your credit card payment as a bill, you are probably correct in saying that.

But if your credit card is used as ‘magic money' to pay for ‘stuff' and ‘experiences' that you don't have available funds for at the time, then I would strongly argue that when you pay your credit card you are not paying a bill at all!

You are actually paying off purchases you made in the past, hoping you would be able to pay for them with money you earn in the future.

Using any method of purchasing something today that you intend paying for with future earnings is really not smart unless that purchase is actually going to earn you more money than it costs you.

Think about it... if you are struggling each week to pay for the things you need to do, and this week you purchase something you want using your credit card, how could it be possible that in the future you will be able to pay for the basics you currently struggle to pay for each week?

In fact, you now have less spare income because you also have to pay off the purchase that went on the credit card!

Credit Card Debt — The Breakdown

It looks like this...

  • Your Income = $800/wk

  • Your Bills = $770/kw

  • Your Surplus =$30/wk

Your financial experience = money is tight!

You purchase something for $1,000 on your credit card and now have repayments of $25 a week.

You are now very close to being upside down and life is even tighter than before! You now must pay for your bills AND that thing, plus added interest, which will just make the pain worse.

This just compounds a lot of the money problems many of us are already facing. We feel more stressed about money, find it harder to relax and enjoy peace of mind, and have to hold off on exciting purchases like family holidays.

In this scenario (and many others) your credit card payment is definitely NOT a bill... However, it IS the cause of a lot of money stress that you could have easily avoided if you had a Spending Planner who was giving you some financial accountability and helping you to better plan your finances!

Here's a challenge for you... Have a look at your credit card balance and see if you can identify how much of it is actually from bills and how much is from purchasing ‘stuff' you just didn't have the cash to pay for at the time. You might get a bit of a surprise!

I'll leave you with that thought.