The homeless person with no debt is a lot happier than the homeless person with a lot of it.
The unemployed people of modern society have a real problem because just a little debt can become an unexpected tragedy. When it’s your turn in the pit of unemployment, your friends might say, “Just search harder for a job.” But in order to find a job, your resume has to be a “good fit” in the minds of HR people. You very well might be a “good fit” in a practical sense, but HR people want to see the right keywords. They also arbitrarily set up prerequisites that have little to do with the job at hand. So people who are burdened with debt are often fighting against HR gatekeepers, not their credit card companies.
We all understand that someone with no credit card debt at all can suddenly lose his job and have no choice but to use his credit cards to pay the mortgage or whatever. But here’s something that we don’t understand until it happens to us. There’s no way for someone in this situation to consolidate his debt onto a new card because to do so, he must have a job. Lying on a credit card application can get you in a worse problem than the debt itself.
So one way to prevent this is to have one or two extra cards while you’re employed. Let’s say someone had to get a huge cash advance from his main card. leaving him with an APR of 22%. Simply consolidating this debt onto one of his extra cards can help him avoid financial ruin. Don’t forget that missing a payment on your main card one time can bring your APR up as well. So it should go without saying that having backup cards is smart, even when you’re unemployed.
The moral of the story here is you can’t have just one credit card no matter what station you are in life. So early on, make the decision to have no credit cards or a few. Having only one will destroy you if you ever lose your job. The homeless person with no debt is a lot happier than the homeless person with a lot of it.