How many credit cards do you own? How is your relationship with Credit Card? Is it helping you managing your finance or putting you deeper in debt?
Americans paid banks $113 billion in credit card interest during 2018, according to MagnifyMoney. That’s up 12% from interest paid in 2017, and up by roughly half over the last five years. Americans will spend $122 billion on credit-card interest in 2019, almost $10 billion more than they did in 2018. More disturbingly, The average APR on credit card accounts has risen nearly 4 percentage points over the last five years, and now stands at 16.86%, according to the Federal Reserve.
The increasing credit card debt has become a top reason for American to battle with debt. How can we have a positive and healthy relationship with Credit Card? The news from Apple might have some answers to it.
Last week Apple made announcement to issue Apple Credit Card. We know through increasing acceptance of apple pay, it is only the matter of time, when will Apple has its own credit card. So here it is!
Like other products that Apple created, Apple Credit Card is no exception of an innovation product. It’s a virtual card and physical card that can be used for both regular and Apple Pay purchases at any place Mastercard works. The way it functions, the convenience it provides as well as the design and look of it are all top notch. There are many news and articles introducing this exciting news. Today I want to focus on the most exciting feature of Apple credit card, why do I think Apple Credit Card could help to crush your debt?
So let me get straight to the point.
The best feature of Apple credit card is that it works directly on Apple pay with real time data to show your spend by each category.
If you are still carrying debt and want to get rid of your debt, this can be an essential tool you need.
I can’t help but to celebrate the amazing power of digital data. We all have credit card statements on line. If we choose, we can log into our credit card websites and check on how our spend has been. If we choose to download it to an excel, we can also look into our spending by category. But let’s be honest here, how often do we make this effort? For me, it is an annual activity when the tax has to be done and a need for itemized spend on the tax return form. So why is it so important to know our spending behavior by category?
Knowing where you spend is the first step towards managing our financials. If you are still carrying debt and want to on a good path to get rid of it, have a budget on how you want to spend and stick with the budget. This real time tool will help you to know if you are on track at any given time. I don’t ever recommend to track your spend to the penny, but knowing how you have been spending on major categories is still quite critical. Take a look at your annual statement today, you will have that “oh, wow” moment to realize you have spent so much on things your memories tell you otherwise, or you are spending more than what you planned in mind.
Now with Apple Credit Card stored in Apple Wallet, that data are shown real time.
I am so excited to see this feature. Knowing real time on how our spending has been creates constant reminder to spending behaviors. If crushing debt is your goal right now, this will help you tremendously to control spend and track to your budget. When you tap on the card, you can see your last transitions, how much you owe and how much money you spend, by each category! It can be the best tool ever in spend control, therefore moving you closer to get rid of debt.
it provides cash back on money spent through apple credit card.
There is nothing fancy about cash back programs as there are many credit cards that offer this program. You might want to ask, if we want to get rid of debt, should we even have a credit card to start with?
Some recommendations were to get rid of credit cards altogether and only use cash when it comes to crush your debt.
Crushing debt is about managing finance and be responsible in spend that will lead to financial freedom one day.
It is more of a mentality change from “it is OK to owe debt just like anyone else around me” to “debt is the biggest obstacle for my financial freedom and I need to get rid of it”.
It requires fundamental behavior change and thought process change to accomplish debt free if you are not on track today.
Credit card has its benefit to consumers. It provides cash back or points that you can leverage to save, so there is no reason to pick up a scissor to cut it out, rather, have the best credit card to help you achieve your goal is the option you should pick. For Apple credit card, you get 2 percent in cash back or 3 percent cash back for Apple purchases. Take advantage of it instead of giving up.
So here you have it, with these two key features, you not only have a credit card, you are having a real time spend management tool at your figure tip that helps to track spend record and enable more conscious spend decisions.
There are other features about Apple Credit Card like lower interest rates etc. This feature should have no impact to you. Don’t ever owe a balance in a credit card. If you can’t grantee yourself to pay for every spend on time, do not own a credit card, period. If you think you can be disciplined to repay without incurring interest charges, then you know why I think Apple credit card could be helping crush your debt.