Are Credit Cards Yin or Yang?

Nearly two decades ago I had a conversation with a friend that elicited a memory that circles around often in my mind. Nancy and I were driving back from Kerrville. We had ridden together to drop our children off at church camp. We had engaged in typical conversation about our children, school, church and other commonalities. Somehow credit cards entered our discussion. It was so bizarre but at the same time we both said “I think credit cards are evil.”

I had thought about the title of this article being “Are Credit Cards Good or Evil,” but felt those terms were too finite. Instead, I felt Yin and Yang were more appropriate. Yin and Yang is an ancient Chinese philosophy that illustrates how opposite forces may be complementary or interconnected. The forces come together which makes the whole better than the separate parts.

Let us apply the yang, which is associated with the sun and positivity, to credit cards. Some of the bright aspects are they provide convenience by eliminating carrying cash. They can help build your credit score which can impact your borrowing ability. Credit cards can offer rewards such as points or miles related to your spending. These points and miles can save on hotels, flights and rental cars to name a few. Credit cards can provide travel insurance for cancelled trips and trip delays. Credit cards can also be more secure than a debit card by limiting your liability from potential fraudulent charges.

Now let us apply the yin, which is associated with the moon and negativity. Credit cards can give us a false sense of wealth. A purchase is made. Next month the credit card bill arrives. It cannot be paid in full. This can connote a person is spending more than they can afford. Having an unpaid balance kicks in the credit card’s borrowing fee or annual percentage rate (APR). According to Forbes Advisor’s weekly credit card rates report, 24.15% was the average APR the last week of March. If you have a credit card balance of $7,500 with a 20% APR, it could take you 106 months, while making smaller payments, to pay off your balance while paying interest of $8,254. Incredible!

The Yin and Yang is when you use your credit cards for purchases and pay your balance off in full each month. You are benefiting from the convenience and rewards while living within your means and not overspending. Choose credit cards that support your lifestyle. There are cash back cards and travel cards. Check out the Forbes Advisor website and click on “Best Credit Cards” link.

My husband, Lane, and I prefer a traditional card that we can transfer points to participating hotel groups and airlines. We also have credit cards issued by airlines that offer rewards in miles. Our son is getting married in May which has involved numerous flights and hotels for the entire family. We purchased and upgraded European flights with reward miles. A huge savings that will be spent on the wedding.

So, yes I still believe credit cards can be evil but prefer to believe there is a Yin and Yang concept where they can work in harmony to benefit lifestyles.

Published in the Victoria Advocate

Phyllis Keller, MBA is the Special Projects Coordinator for KMH Wealth Management, LLC and Keller & Associates CPAs, PLLC.