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| quote: | Originally posted by Enigmatik
The Truth About Credit Card Debt
Myth: Aren't there positive uses of a credit card? Like rebates and airline miles?
Truth: Responsible use of a credit card does not exist. Credit card debt is a major problem in America.
There is NO positive side to credit card use. You will spend more if you use credit cards. Even by paying the bills on time, you are not beating the system! But most families don't pay on time. The average family today carries $8,000 in credit card debt according to the American Bankers' Association.
Now let's talk about the rebates. If you were using a credit card at 5%, you would have had to have spent $80,000 to get $4,000 rebates on new cars that lost $6,000 of value when you drove them off the lot. That is not a good deal!
Cash vs. Credit Cards
When you pay cash, you can "feel" the money leaving you. This is not true with credit cards. Flipping a credit card up on a counter registers nothing emotionally. If you use credit cards instead of cash you will spend 12-18% more. This is money you could have saved.
If you "have to" use plastic, I suggest a debit card. I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.
Personal finance is 80% behavior. You need to cut out habits that make you spend more. You do not build wealth with credit cards. Use common sense. When you play with a multi-billion dollar industry and you think you're going to win at their game, you are naive. You cannot beat the credit card companies. |
 That's only good advice for irresponsible morons!
Yes good can come of credit cards, by using them sensibly and paying off in full. My wife and I have just bought airline tickets and by timing the payment of them right we don't effectively need to pay for them for seven weeks. We paid for them the day my rolling month began, so the statement doesn't arrive for four weeks, then you have three weeks to pay for that statement. In that time we earned $250 in interest on the amount of the airline tickets that we wouldn't have done if we paid cash or used a debit card.
We use our credit and chargecards for everything and pay them off in full each month. We use them for attaining hotel points and frequent flyer miles since we travel quite a bit. There should always be a benefit to having a credit card, whether that be a low interest rate and don't pay it off in full, or you pay it off in full and get some cash rebate or have some reward scheme benefit. I don't see these things as gimmicks. I see it as getting a benefit I wouldn't otherwise have. I don't need the credit facility on my cards so I want something else from it.
I find credit and charge cards invaluable, I get good benefits (discounted hotel scheme, car rental insurance, airline lounge access etc) and feel I have some protection. Speak to those people who paid cash for airline tickets on Aloha or ATA. They're screwed. Those who bought on credit cards just made one call. Have your wallet with $500 cash stolen, it's gone. Have your wallet with Amex card inside, one call and it is cancelled and sorted out.
As with anything using it sensibly is the key, buying a car on a credit card is fucking idiotic. Someone who says credit cards are the devil has no restraint and shouldn't have one, but then also shouldn't be giving out advice on these matters either!
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| quote: | Originally posted by Brizzo
"It's all gone Pete Tong" is actually a phrase in Europe, England I believe. Pretty sure that's where Pete Tong got his DJ name from as well. |
The infamous Rojam ID. 14 years, 9 months and counting...
Last edited by fbgdavidson on Apr-13-2008 at 16:54
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