Status quo: keeping everything the same. Most of our daily lives involve maintaining status quo. And this isn’t a bad thing. When you find something that works, it’s nice not to have to give it another thought.
But, at the same time, status quo can be the path of least resistance. And the path of least resistance, while the easiest path, isn’t always the best one to be on. Striking a balance is key. This is true for most aspects of our lives. Jobs. Relationships. Finances. Where we live.
It means that every once in a while, it is good to examine those choices and ask if they remain the best choice.
Changing banks, to be sure, is a pain. That’s especially true in this electronic age with automatic payments linked to bank accounts. Additionally, you would have to wait for a new debit card. Maybe go to the bank a second time to change the pin number on that debit card to one you’ll remember. You’d have to order new checks. (My sister is convinced I, single-handedly, am the last person on this earth who still uses checks but I know that isn’t true.). No question, making the change is a time-consuming pain.
It’s the reason the path of least resistance is so appealing.
That’s certainly how it was for me when it came to my credit card. For many years—an embarrassingly number of years—I walked that path of least resistance. I walked it long after I knew my credit card was a terrible (and costly) choice.
The Story of Me and My Credit Card
Like many Alaskans, I had the Alaska Airlines credit card. It was a good choice when I applied for it all those years ago. Alaska Airlines is a prominent airline for both in-state and out -of-state travel. And with Alaska being so physically far from the Lower 48, it only takes a few trips before you reach 25,000 miles, enough for a free ticket.
I didn’t have the credit card for too many years when the benefits started to diminish. First, the board room pass and the first-class upgrades disappeared. Then the companion ticket was $50 and then $99.
There are smaller benefits like miles for every dollar you charge using the credit card. And two dollars for every Alaska Airline ticket you purchase with the credit card. So, for people who travel a lot, this might be a great credit card choice.
Even after you factor in the annual fee of $75.
In my case, that annual fee is what made it such a terrible choice. In the 15 years I had the credit card, I used the companion ticket once. Once. I cringe when I do the math on my “free” companion ticket knowing I actually paid well over $1,200 for a ticket that was probably only about $600 to begin with.
It’s not a pretty picture. And it’s hard for me to admit here. Especially since I consider myself financially smart. Remember, I’m the person who bought blue carpet instead of black for my RV stairs to save $6? I guess I am a financially smart person who hasn’t always made financially smart decisions.
Finally Getting Off the Road of Least Resistance
Making the decision to radically change myself from a sticks-and-bricks, 9-to-5, retire-at-65 person to a full-time RVer who still isn’t sure how she’ll support herself down the road became the motivation I needed to finally change my credit card.
When I got yet another notice that my annual fee would be charged to the Alaska Airlines credit card in late July 2015, I vowed not to pay that $75.
Choosing a New Credit Card
My number one priority for my new credit card was that I paid no annual fees. The number two priority was for it to have a reasonable interest rate. That said, since I’d worked so hard to become debt-free, my absolute intent was (and is) to pay off the balance every month. So really, the interest rate should not have mattered. But it did. Fear, probably. Lingering fear from my high credit card balance days.
And since I was on the path to becoming a vehicle traveler, I no longer cared if a credit card offered airline miles. It was the other card benefits, the reputation of the company and my two priorities that were going to determine which card was right for me.
I applied for my Alaska Airlines credit card before the internet became such a quick way to find information. Comparing cards was a lot harder then. In fact, I didn’t compare at all. Like many people I was on a flight when I was offered a brochure about their card. I completed the form. Sent it in. A few weeks later I had an Alaska Airlines credit card. Then 15 years went by.
This time around, I spent time doing my research, comparing cards. I read the fine print and I read lots of people’s opinions about the best cards and offers available.
I ended up going with a credit card that offered cash back. It was the benefit that appealed to me for my new life because that cash could be used for anything.
Life After the New Better Credit Card
Because of my history of debt after graduate school, including credit card debt, I never felt it was a good idea for me to pay my regular bills with a credit card. I know people do it to rack up miles. Also, one mile for one dollar seemed like an extraordinary tedious and slow way to earn miles.
I changed my tune when I was racking up cash.
By then I had laser-like focus on saving money. I wanted to have as much as possible when I embarked on the RV life. Money was going to buy me a setup and a few years of life on the road. I saw every dollar saved as another day on the road.
Finally, before I hit the road, I increased the card’s limit. I did it while I was still working since the limit was tied directly to my credit score and my income, i.e., their assessment of my ability to pay the debt.
Even though I have the advised 6-month emergency fund that is cash, I consider the credit card with its $20,000 credit limit the backup emergency fund. I’ve written before about my strong need for security. Therefore, I want to acknowledge I’m not offering this as advice. Not everyone may find a backup emergency fund necessary for their sound mental health. I do. And it doesn’t cost anything to have a high credit limit.
The take-away here is to do your research. And, every once in a while, ask yourself if you are living a status quo life or an actively-chosen life. Start small with your bank or credit card choice. And grow from there. Who knows where it might lead.
What are the most important considerations for you when it comes to a credit card? When was the last change you made from the status quo? Share your thoughts in the comments.