Credit Cards - The Path To Poverty!
- Thread starter Polychron
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Credit Cards are OK if you have half a brain and a minimum of willpower.
Just treat them like a monthly bill instead of an 'instant loan' and you will be fine. That means not buying tons of crap on impulse and paying the entire amount at the end of the month so you don't run a balance.
When you treat a Credit Card more like a easy to use Check consolidator and less like 'free money' you are less likely to fall into the debt hole.
In fact, I find that I don't use my CC to 'replace cash' so much as I use it to replace my check book. It's much easier to manage the petty cash when you run a balance 'down' rather than run a tab 'up'. Thus using the CC only for large purchases or online buying is easy to track and keep a closer handle on. But using a CC to buy all those little 'conveniences' like snacks, fast food and low cost impulse buys like the latest CD from XYZ is a easy way to run a high balance without 'seeing' how the balance runs up and you end up 'Nickel and Dime-ing' your money into debt.
Sure you can use the CC like it was your own personal 'company card' to pay for and track things like meals, gas or business expenses, that also requires that you have enough not only enough cash to deal with the minimum premium cost those that type of spending entails. And it also requires you have enough willpower to stick to a budget and avoid overspending on additional things as well as keeping the costs down on the things you do use it for.
In short, cash = king.
Just treat them like a monthly bill instead of an 'instant loan' and you will be fine. That means not buying tons of crap on impulse and paying the entire amount at the end of the month so you don't run a balance.
When you treat a Credit Card more like a easy to use Check consolidator and less like 'free money' you are less likely to fall into the debt hole.
In fact, I find that I don't use my CC to 'replace cash' so much as I use it to replace my check book. It's much easier to manage the petty cash when you run a balance 'down' rather than run a tab 'up'. Thus using the CC only for large purchases or online buying is easy to track and keep a closer handle on. But using a CC to buy all those little 'conveniences' like snacks, fast food and low cost impulse buys like the latest CD from XYZ is a easy way to run a high balance without 'seeing' how the balance runs up and you end up 'Nickel and Dime-ing' your money into debt.
Sure you can use the CC like it was your own personal 'company card' to pay for and track things like meals, gas or business expenses, that also requires that you have enough not only enough cash to deal with the minimum premium cost those that type of spending entails. And it also requires you have enough willpower to stick to a budget and avoid overspending on additional things as well as keeping the costs down on the things you do use it for.
In short, cash = king.
I think it has largely to do with how much we're talking about. They only give me about $2,500 in credit. That's less than my monthly wages. So even if I maxed myself out I can pay it back in 1 or 2 months of frugality.
It's all about flexibility for me. I'll do lots of research and decide exactly what I want to get. Then I'll save up for it. However, sometimes that one time only sale will come along before I'm done saving up for it. That's when I'll use the credit. I was saving up for it anyways, so that monthly allotment that went towards saving for the item just goes to the credit card instead.
You do have to be careful with this method though. Make sure that what you're saving from it being on sale is more than what you'd pay on interest.
It's all about flexibility for me. I'll do lots of research and decide exactly what I want to get. Then I'll save up for it. However, sometimes that one time only sale will come along before I'm done saving up for it. That's when I'll use the credit. I was saving up for it anyways, so that monthly allotment that went towards saving for the item just goes to the credit card instead.
You do have to be careful with this method though. Make sure that what you're saving from it being on sale is more than what you'd pay on interest.
shadow_dragon
is ironing his panties!
I hated them so never used them, got my first one this year because you actually need one.
How else are you going to have a good credit rating for when you want to get a mortgage?
I don't know why you'd have more than one credit card though, for me all it means is I pay for things a month later than I obtained them, which means I get to earn a tiny percentage of money on interest rather than someone else so it's good stuff really.
If you're getting a credit card as a means of borrowing money though... then good luck to you I suppose.
How else are you going to have a good credit rating for when you want to get a mortgage?
I don't know why you'd have more than one credit card though, for me all it means is I pay for things a month later than I obtained them, which means I get to earn a tiny percentage of money on interest rather than someone else so it's good stuff really.
If you're getting a credit card as a means of borrowing money though... then good luck to you I suppose.
I only use a single credit card but I charge everything to it. I've got the smarts not to buy small petty things I don't really need and my monthly bill is rarely over 200$ which is easily doable.
We charge everything to our credit cards, but are smart enough to treat it like real money, meaning we check the balance and only spend however much we can afford. We pay it off every month to avoid fees. Anything is the path to poverty if you're an idiot about it. That means getting home loans that stress your budget and then blowing cash on big screen televisions and new cellphones every 6 months or putting more money than you can reasonably pay back on your credit cards.
~Jason
~Jason
I finally broke down and got two a few years ago because it makes getting an apartment so much easier (a lot of people treat no credit the same as bad credit), and I knew I'd be getting a car soon so I wanted a good interest rate on the loan. I put a few things on them every month, things I'd buy normally anyway, just to keep them active. Otherwise I treat them like a rabid badger with AIDS.
where's the poll option "I ran up credit card debts in college and was kinda ****ed after graduation, but I've paid them off now" ?
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Yeah, a financial institution creating some sort of system to asses the risk of lending someone money is cruel and inhumane.
