Different Types of Credit Card Users
Saturday, January 12th, 2008Have you ever stopped to think about type of credit card user you might be? Most people just spend the way that they spend and assume that others do the same. However, there are different types of credit card users with distinctly different spending styles. Knowing what type of spender you are can help you to make sure that you understand your spending. And knowing what other spending types are out there can assist you in making some wiser choices in your spending habits.
The most common type of credit card user is the “I need just a little bit more than I have” kind of person. You fall into this category if you have a job with a decent income and are able to pay your bills without too many difficulties. However, you have to use credit cards in order to get those luxuries that you feel like you just can’t live without. You make big purchases, like electronics, on your credit cards. Most likely, you pay more than the minimum balance due each month but you do carry a balance on one or more cards.
Another type of credit card user is the “I need it all” kind of spender. You fall into this category if you regularly live beyond your means, using credit cards to get by. You may pay your monthly bills on credit cards. Or you may just use the credit cards for everything from groceries to movie tickets to putting gas in your car. You almost never pay more than the monthly minimum balance on your credit cards and therefore are always adding a higher and higher balance each month.
At the opposite extreme is the person who only uses credit cards in emergencies. You’re this person if you hate to carry a balance on your credit cards and always put it off in full whenever you do use them. This person almost always has a savings account and rarely makes purchases for things other than necessities. While this can be good for financial stability, under-use of credit cards means that you’re failing to establish good credit.
There’s nothing wrong with being any of these types of credit card users. Those people at the opposite ends of the spectrum (the over-users and under-users) can learn something from those people in the middle by taking a less extreme approach to spending. However, the average user can also learn some tricks from the people who either over-spend or under-spend on their credit cards, like using rewards credit cards to earn miles or cash back. The key is to find out what kind of credit card user each of your loved ones is and to compare notes to make wiser choices all around.
