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To use credit cards,isn't it a gamble to think that we will have the money later when we do not have it now?
Is it not a sure chance of going bankrupt to use credit cards too often and when the bill comes we have to pay more than we actually could have spent if we had paid cash in the first place?
I am not well versed in financial matters:) so would love your input on this.
Thanks
It is a gamble - for both parites. If the cardholder goes bankrupt it ruins his credit for a long time and the card issuer never sees the remittance.
Credit is way too easy to get and is abused way too often.
When used properly, it is a great financial tool. When used improperly it becomes a millstone around one's neck.
My credit cards only see the light of day when something goes wrong with my car (which isn't too often) or I am on a business trip. Other then that if I can't pay cash I wait until I can pay cash.
No gamble for the way I use them. It just replaces the cash that I already have in the bank. I don't use credit cards as a financing method.
It isn't a gamble if you know you have money enough to cover the debt when you make the purchase... plus a little insurance backup.
I use my credit cards mostly for travel. I'm required to pay out of pocket for my expenses, then file a travel voucher. I float the cost of my travel for the company. One must be careful when doing this. I need to keep a cushion in the bank account. If it is close, I can ask for a travel advance. But, I need to know how long it is going to take to get my travel voucher back. I can judge it to within a day. That day had better not be the day my credit card bill is due.
I also use on-line banking, so there is essentially no lag between when I hit the PAY button and my payment is recorded.
Thanks for your input.
I guess it takes each individual to stay debt free with or without a credit card.
I know someone who is in debt,has loans to pay and yet still uses his card to make purchases every month.It is so foolish,knowing that each month the bills will be added to his already existing debt.
Now it has become a never ending circle because each month the bills increase and yet he also has the monthly regular bills and expenses to pay.
I can't see him getting out of debt soon if he continues his lifestyle and he is not single that he can just stop spending and save until he can pay pff all his debts.He is married with two kids(or three now,I think? ).
Sounds like the federal government.
Just like the gov, he is living beyond his means. That is a problem of discipline. The gun folks always say, "Guns don't kill people, people kill people." Same is true here. Easy credit isn't the problem. It is the lure of "goodies" and personal weakness.
Hello firm'Quote:
Originally Posted by firmbeliever
I personnally don't have a credit card, simply because it is so easy to use when you have money troubles( we all have them at some point in our lives). I do have a debit card that only allows you to spend the money you have in your account.
Society today dictates that you should have the latest mod cons in your home, a car better than your neighbours and that clothing should be the current fashion.
Unfortunately some people seem to judge you on what you have and not what you are, it's a materialistic thing.
I look around my home now thinking.. yes it's clean and paid for but all worn out, I could spend several thousands just to be able to say, mines better than yours but why bother you'll leave this life with exactly what you came in with... nothing.
I understand that it is necessary for business people and alike to have the use of a credit card, especially if it involves travell exspenses and so on, but I always say if I have to use a credit card then I can't afford it and I go without.
If something happened to me then I couldn't bare the thought of leaving all the debt for my family to sort out.
No disrespect intended for any one who has a credit card, it's just my own personal view.
Hey, Orphan, I like your post! When I was young, I got a credit card and I used it in times where I thought I NEEDED it... like a short term hard time (gorceries, cigs, etc)... but then I realized, before I had the card, I somehow made it through on my own. Whether I returned cans or did an odd job, I made it and was fine and used whatever money I could scrape up wisely. When I used the credit card in tough times, I didn't use it wisely... while I bought the things I needed, I also bought some things here and there I didn't need... like a soda and snack when at the gas station, an extra luxury item or 2 when at the grocery store... the credit card only made things worse in the end.
I have no credit cards and no store credits anymore, I see no need for it in my life. I have a free debit card with my checking acct that I can use just as a credit card so I can shop online or make reservations at a hotel, etc. I have never been one to buy things to impress others, but I know many people do... I'm glad I don't have that mindset. My home is nice and clean and comfortable for ME... not for whoever comes over... I don't put things in my home to impress anyone. I paid cash for my cars and I feel great knowing they are paid for. I would rather deal with what I have within my grasp than be constantly chasing after the "next big thing", with the main motivation being to look good in front of others. I never fully understood why people would extend themselves so far out just to look good on the outside. It must be a sad life.
Never fear, accounting person is here.:D (OK, so I have the same amount of wine in me that I did when I posted a few minutes ago. Or, perhaps it's just because I've been watching old reruns of Lost in Space and Dr. Smith was always saying, "Never fear, Smith is here.")
Um... OK, let's be serious for a minute. What do you think an accounting person would think of credit cards?
Does the government learn from the people or do people learn from the government? (Good point, rodandy. Sometimes wish I could leave reputation in these forums, but I see where that doesn't make sense.)
At any rate, I think the overall concept of credit cards is just fine. But like guns, it's how people use them. They can be perfectly safe, and they can be dangerous.
Being in the profession I am, having worked for a lot of small companies, and also just somehow tending to get into financial discussions with people (I wonder how THAT happens!), I am a little too familiar with bankruptcy and far, far too familiar over people's silly ideas about money. It makes me want to puke sometimes. Did schools ever start adding a personal finance class? They should.
I have one regular credit card, and two debit/credit cards that are connected with checking accounts. I have no issues with them. And I even use them quite frequently. Obviously, the debit/credit ones will come directly out of my account, but I have no problem with the "real" credit card either. I stick anything I want onto it, and I pay it off every month. Owning a house, many house expenses end up on it, like lots of trips to Lowe's and Sears. :) And I pay it off cause I don't charge things I can't pay. It's just a convenince to me, and certainly it's convenient.
But I also went through some bad times and discovered problems can happen to anyone. Don't ever want to be back there again.
The thing is, you can't get any credit without having credit cards or a loan or whatever. So you almost have to have credit cards to get enough credit to, say, buy a house. And of course, online a credit card can become necessary. (Although a debit/credit card can work for that, for someone who can't handle credit.)
So the real problem is not with the credit cards themselves. It's with the fact that people (especially Americans) don't know how to handle money. Marketing is geared towards credit. It's almost like the credit card companies want you to go bankrupt or something. Even older people can be lousy about money. But I think we have a generation of people growing up that not only don't get that credit cards have to be PAID!! but that also want everything NOW. There's no such thing as saving for something anymore. And not only does saving for something work better for one's money situation, it's also much more satisfactory to work for it and then finally reach that goal. Means nothing when you can get everything now.
Firmy (so is that your official nickname?), don't know what to tell you about this person you know. It's difficult to convince someone whose mindset is already there. People are not very good consumers. Make them listen to Clark Howard. :) Just like everything else, I think it goes back to what you learned from your parents, and it seems like anymore, that's nothing.
Orphan,
It is true, we will leave this world with nothing and I too don't like to leave my family a whole mess of debts for them to pay.
I do have a credit card but would rather carry cash for everyday normal shopping or even special shopping once in every few months.If there was dire need for something and then I would use the credit card but until then I would rather not use it that often.
Hi morgaine,
Yes Firmy seems to have become the official nickname :).
I agree with you in that credit cards need to be handled a certain way to stay off debt.
From where I see it I think it is a novelty in my community,a status symbol to be able to use the credit card no matter how much in debt one is in at the end of the month. And as I said a never ending cycle.
For a person who has a fixed income, at the end of the month he is going to be paid the same amount,nothing more.Yet he spends above and beyond his means and fools himself into thinking that he can magically pay off his household bills plus the credit card bills.
That is utter foolishness.
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