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Why I Disagree With Mark Cuban's Credit Card Advice

A customer handing their credit card over the counter to the cashier at a cafe.

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Mark Cuban is a billionaire known for providing some sound financial advice over the years. But there's one thing that Cuban said about credit cards that I strongly disagree with.

On his blog, Cuban said that using a credit card should be avoided. In fact, he advised readers to, "Cut up your credit cards. If you use a credit card, you don’t want to be rich."

Why I don't agree with Mark Cuban's credit card advice

While this advice might sound good on the surface, credit cards themselves don't prevent you from becoming rich. The wealthy use credit cards all the time. And they can actually be a tool that helps you improve your personal finances.

The reality is, credit cards can do a lot of great things for you. They can help you improve your credit score. This can make it easier for you to borrow money responsibly to do things like start a business or buy a home (which can help improve your net worth).

And if you use your credit cards to earn rewards, they can help reduce the costs of your purchases. If you get 2% cash back on everything you charge, for example, you're essentially getting a 2% discount.

Credit cards can also help you tackle debt. You can use a balance transfer credit card to reduce the interest rate you're paying. Or you can pay for big purchases over time without paying any interest if you get a credit card with a 0% introductory APR for 12 months. And they make renting a car or hotel easier, since you don't need to worry about using a debit card and having a hold placed on it that prevents access to your money.

Instead of avoiding credit cards, use them wisely

With so many benefits, listening to Cuban's advice to swear off credit is shortsighted. Instead of cutting up your cards and avoiding them, the key is to make sure you're using them wisely. That's because credit cards only cause you problems if you end up carrying a balance on them that you can't pay back.

In some cases, people end up carrying a credit card balance because they have no other choice when a dire emergency happens. If that's the case, it's still better to have access to that card, rather than get stuck with very high interest debt, such as a payday loan.

In many cases, however, people get into credit card debt because they aren't budgeting carefully or because they are living beyond their means. In this case, credit cards aren't the problem but rather just a symptom of it. Instead of being afraid of credit cards, or cutting them up, it's far better to take control of your financial situation so you can make credit cards work for you.

Getting used to living on a budget and monitoring your spending is the real ticket to becoming rich. And you can't shortcut that just by swearing off credit card debt and cutting up your cards. Instead, it takes a commitment to your future self to behave responsibly today so you can have a better tomorrow. Working on getting to the point where you make that decision is a far better approach than simply ignoring all the advantages credit cards provide.

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