When Responsibilities Collide

As expected, I received a ton of pushback after my credit card post a few days ago. The number one response I get whenever I discuss this topic is the following: people just need to be responsible with credit cards. Another version: Credit cards can be a useful and beneficial tool IF they are used responsibly. What does it mean to be "responsible?" Here's the definition:

Responsible: having an obligation to do something, or having control over or care for someone, as part of one's job or role.

This makes a lot of sense. When we use a credit card, we need to be responsible by making payments on time and paying back what we've borrowed. We have an obligation to do so. I'm tracking. I believe the vast majority of Americans understand this responsibility. When people pull out the plastic and swipe it, they are well aware of the obligations and responsibilities at play. 

Life is full of responsibilities. Paying the credit card bill is a biggie. There are a bunch of other critical responsibilities on the table as well:

• Pay the mortgage/rent

• Put groceries on the table

• Clothe our growing kids

• Maintain and fuel our vehicles

• Health insurance and co-pays for medical services

• Ensure we have working utilities such as water and electricity

So many responsibilities!

When life is going well, we find the balance between the many obligations in our household. Shelton, food, clothing, transportation, medical care, and a long list of other needs (plus hopefully some wants). 

But what happens when life doesn't go smoothly? What happens when the car breaks down and we need to repair it? What happens when a kid gets sick or breaks an arm? What happens when the furnace goes out and it's too cold in our house? What happens when we lose a job and the income associated with it?

The moment we face tensions in life, our responsibilities collide. People don't get behind on their credit card bills because they are being irresponsible. Rather, it's because they ARE trying to be responsible. If we have the choice between eating and not eating, we're pulling that credit card out. If the furnace is broken and our family is getting cold, we're using whatever means possible to get it working again. If the car breaks down and it's the only way we're able to get ourselves to work, you better believe we're getting that repair done. If the landlord or mortgage company starts asking for their monthly payment (or else!), we sure as heck will step up and make that payment. 

In those moments, we have choices to make. Difficult, painful, and often embarrassing choices. And as I always say, credit cards are the path of least resistance. Not to be irresponsible with debt, but to be responsible for providing our family's basic needs. 

Does that context change your perspective? I hope so. But if not, I still love you and am grateful for your willingness to read each day. 

The Path of Least Resistance

As a kid, I was fascinated by the section in science class where they showed images of how rivers changed shape over time. As sediment is carried and eventually dropped, the speed and direction of the water flow shifts, carving a different path into the earth. The water constantly follows the path of least resistance.

Human behavior is much the same way. Whenever we have an array of options in front of us, we're likely to select the path of least resistance. We can get out of bed, drive to the gym, and get a workout in......or just stay in bed for another hour. The path of least resistance. We can prepare lunch the night before work.....or we can just grab a sandwich at the deli next to our office. The path of least resistance.

This is one of the many reasons I suggest clients cancel their credit cards. This suggestion is often met with eye-rolling and a staunch defense that includes something like "I'm always responsible with it." These comments are typically combined with defenses revolving around the benefit of points, the fact they pay them off every month, the perception they are safer, and the fact they are building credit.

One problem. Eventually, the path of least resistance will come into play. Two families in my life are living this reality as we speak. I've suggested for years that both these families cancel their credit cards. One family doesn't even use them....hasn't for years. It's "just in case," and that's what I'm afraid of.

As I always say, credit cards seem like our friend.....until they become our worst nightmare. Fast forward a few years, and both families are facing financial challenges. It's a combination of medical, auto, house, and job-related situations. Both of these families handle their money relatively well. They've made good decisions and are going in the right direction. One problem, though. They still have active credit cards. Just like the sediment in rivers, financial challenges will cause us to seek the path of least resistance. After all, pain hurts. Stress sucks. Tension puts a strain on relationships. There's a simple way around all that. It's the path of least resistance. Out comes the credit card.

We're going to use it just this one time, though. Well, maybe just the things we need. Then it shifts to putting everything on there because seeing our savings dwindling is scary. But just this month. Next month we'll get on top of things and back to normal. Except the path of least resistance didn't actually make this better. It just dropped more sediment, causing us to push deeper into the path of least resistance. Fast forward a few months, and our reality looks much different. We went from the family who said, "credit cards are great if we use them responsibly," to another statistic. Tens of thousands of dollars in expensive debt, in the snap of your fingers.

My heart breaks for what these families are now dealing with.