[quote]swirly wrote:
I’m not going to have any credit cards when I get older. I’m 18 now and don’t have one. I figure, my Grandpa did it, so I can too. And I don’t understand the concept, if you don’t have the money for it then you don’t need it/ you can’t afford it. Period, end of story.[/quote]
If you have the money for it, using a CC still has many advantages.
It builds your credit rating, as many have already mentioned; you won’t find yourself in an emergency with too little or no cash; if it’s lost or stolen, you’re not liable over $50; you get to keep your money for about a month more, so that a $5,000 purchase can get you a extra month of interest before you pay off your card; most cards have perks, I get hundreds of dollars per year from “1% cash back” offers. It makes purchasing over the internet a lot simple, and if you get fucked over, you can call the CC company and get a charge reversed; and most card offer various travel perks and warranty extensions.
Basically, the only rule to follow is: Pay off your entire balance each month.
I’ve never had a credit card and until now I’ve always managed to live within my means. Actually it’s not that hard for me. My interests and hobbies are pretty cheap. Fishing, walking in the woods, lifting weights, gardening, good foods, books…that’s all.
I don’t drink alcohol, I’m not interested in fashion trends (wear cheap clothes and shoes), I don’t give a shit about big cars, don’t like traveling…plus I live in a country where taxation is low, general medical care is cheap (anyway I haven’t see a doc for more than 10 years)…
I put everything possible on the CC. With the rewards and other perks, why wouldn’t you? Last year I got cash back, which bought me a Colt King Cobra slabside. Who doesn’t want a free gun?
I have one credit card and I use it one time monthly and pay it off the next day just so I can build up my credit score. Plus the company doesn’t earn any interest off of me then. That’s my way of sticking it to them! They like that I use my card but don’t make money off me! I typically use my debit card for everything, it’s rare for me to carry more than 20$ in my wallet at a time.
In a way I don’t like using my debit card for everything, but it’s hard to get around the convenience. I have a running tab of my money on my bank’s site that I verify with my writen records. Easy.
[quote]Drater wrote:
I have one credit card and I use it one time monthly and pay it off the next day just so I can build up my credit score. Plus the company doesn’t earn any interest off of me then. That’s my way of sticking it to them! They like that I use my card but don’t make money off me! I typically use my debit card for everything, it’s rare for me to carry more than 20$ in my wallet at a time.
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They make money every transaction, either a fixed amount per transaction, or a percentage. If you really wanted to stick it to them, you would find a CC merchant that charges per transaction, max out your card at the beginning of the billing cycle (in one swipe), and pay it all off at the end of the month. Even then, you’d be hard pressed to ‘stick it to them’.
[quote]Drater wrote:
I have one credit card and I use it one time monthly and pay it off the next day just so I can build up my credit score. Plus the company doesn’t earn any interest off of me then.[/quote]
They don’t charge interest until about 21 days after you get your statement. Pay the total by the date due, and you can use your CC all month long. Right now, by using it one day and paying it off the next, you’re losing interest you could be making on the money. You’re sticking it to yourself.
I’ll echo what was said earlier… CC are not some evil being if you can manage your money. I have a shell card that earns me 6% directly off the bill when I buy gas… think about it, at 3 dollars a gallon that means I pay 2.82 instead of 3 dollars per gallon. What you have to do is pay it off each month… It really is not that hard to do…
I also have a kawasaki card because that got me 2 years at 6% when I bought a ninja last summer (which is paid off next month)…
Can they get you into trouble? Sure, but knowing that if my car breaks tomorrow I dont have to come up with the cash to fix it is priceless…
-ratchet-
also, a good credit score will save you thousands if not tens of thousands when you finance a house…
A credit card isn’t absolutely necessary to build credit. If you buy a car on credit or get utilities in your name you will also build a score. I am in my 40s and have excellent credit. Partly because I am old and I don’t over-spend. I do buy things like tools and toys and camping gear but I don’t do that on a card. I did use credit cards when I was remodeling a house and when I was still in graduate school. I now have one mainly to rent cars when I travel and I have one issued by my employer for work emergencies.
In my opinion there is no sane reason for me to have a card. If I can’t afford something, I probably don’t need it. I don’t go “shopping” for entertainment and buy shit that I am told I should own. I don’t want to be a professional consumer and therefore further tied to work to pay for this stuff.
We live in a weird time in history where it seems to be our goal to voluntarily enslave ourselves to buy stuff made by the corporate structure who probably pays us.
On top of this, I really don’t like the personal tracking of purchases that occurs with card purchases. We are told it is for our own good for “target marketing”. I am not a target to market more shit made in a sweat-shop on the other side of the world so some corporate dick can get a little richer.
I am not alone in this as quite a few of my friends and acquaintances have done this cash economy thing as well. Once you have a place to live (don’t buy a house outside your means) you don’t need much. A successful friend of mine, after building his own house on paid-for land, gets by really well on $12k per year.
Just an example of what assholes banks have been: I quit my job to live a quieter life and move somewhere cheap. After selling a house in a very expensive town, I moved to the midwest with some cash, no job, and no prospects. I was offered over $300k+ in this condition as my previous income was good and credit score was high. That would have been crazy to accept since I would have been scrambling to make that enormous payment every month for the next 15 to 30 years.
I feel strongly about this and don’t generally talk about it as it makes me sound like some kind of anarchist to not want to be a consumer in our political climate.
Sorry to rant BUT except in some rare, well-reasoned cases, credit is generally BAD.
[quote]pookie wrote:
Basically, the only rule to follow is: Pay off your entire balance each month.
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Actually, the only rule to follow is do not spend more than you can pay off every month. This is usually an amount less than ones total monthly income. To help alleviate the necessity of credit one might try SAVING something because when one does actually need to use credit one becomes more credit worthy if one has some money put away for a down payment. People who cannot even save a little bit are not a good credit risk, in my opinion.
I was just talking to a friend who got rejected for financing on some new furniture. The total amount he would have needed was only $2000 but he makes over $100K per year. I asked him why he needed financing with a hefty salary like that. All he could think to answer is, “I dunno, we always do it that way.”
So yeah, this mindset of “immediate gratification” needs to change if we expect the “economic crisis” to ever be fixed.
I got my first CC when I was 18 and started accruing credit then. It was used for big purchases that I had the money to pay off. Then college came, and I used it for emergencies (timing belt broke on car, moving expenses etc) and my folks paid the minimum. I came out of college with that card maxed at 10k. That was 2.5yrs ago and I’m just under 1/3 of what is left; haven’t used it in 2yrs.
Once that card is paid off, I am closing the account and never opening another one. They are retarded. There are other ways (more when you get older) to get credit.
Another poster brought up the “perks” idea, which is good and I suggested it to my girl to snag one b/c she has NO credit. But she also makes enough that she won’t have any problems paying it off. If you are on a tight budget…don’t get a CC…just keep trimming the fat and looking for ways to save.
I read “the 4hr workweek” and “I will teach you to be rich” in the past year and both gave great ways to save and improve my life with respect to both time management and financially.
The replies are awesome - as for Liftus Maximus, yes, the wife & I are def. going all in on paying that bank loan off quickly ASAP STAT. Reason? Lowest interst rate vs. having to pay high & varying interest rates to assorted creditors. Best to have one main creditor as opposed to a whole bunch that we would have to keep track of & it is a better repayment schedule for us.
I appreciate the dialogue that all the other posters have engaged in & the advice & anecdotes… It is scary yet educational, eye-opening, angering, saddening, & enlightening in many ways.
I will say the CCs left frozen in a cup in the freezer is a great idea. Until the power goes out & everything melts
I love my parents but everything that they taught me about money was wrong. I grew up being told how you needed credit cards, and should get one as soon as humanly possible, then USE it so you can build credit. I wish I could go back in time and shake some sense into myself.
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same with me. i bought all their hype about CCs, and at one point i had 20K on CCs.
Been debt-free over 3 years now (except house).
To the OP, i’ve lived 4 years on cash/debit only. Yes, debit works for car rentals and hotels. My bank even has a silly cash reward program. You just need to follow your checking account closely and budget. Adjusting to the transition is harder than living with debit…its easy now for me.
Oh yeah, dont forget the power of cash. You can walk into appliance, furniture, electronic stores w/ a wad of hundreds and get deals! Works with service companies too. If you roll bargain hunting into your lifestyle as well, you’ll be flush with cash in time!
[quote]pookie wrote:
They don’t charge interest until about 21 days after you get your statement. Pay the total by the date due, and you can use your CC all month long. Right now, by using it one day and paying it off the next, you’re losing interest you could be making on the money. You’re sticking it to yourself.
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Wow, you and johnnytang24 made good points. My comment showed just how financially unsavvy I am. I’m kind of like the person who said their parents didn’t teach them right. I just thought build my credit score and pay it all off, didn’t think about anything like building interest on MY money. Maybe I’ll check out that book on Amazon those other two suggested!
Never had one never will. Borrowed for a morgage once, the ex’s idea, now she has a house. Other wise I have never had a loan. I get by better than most. If I want it I save for it. You’d be surprise how much you think you want, impulse buying, but discover how much you really don’t need. Life is simple, credit makes it difficult.
[quote]streamline wrote:
Life is simple, credit makes it difficult.[/quote]
Especially when you are one of the wise ones who has saved and thus is the person people come to when they are in “need”. You then get to exercise the ultimate moral decision of who is “needy” and who is not. Difficult, indeed.
Precisely why there exists such a thing as credit ratings and why I prefer banks to take care of the “needy”.
I agree credit cards aren’t for everyone, but in my opinion Debit cards are for suckers. You get no benefit at all for using a debit card. No credit score increase and no interest on your money.
Like Ratchett said, a good credit score can really save you tons of money when you decide to take a mortgage.
FYI for those trying to build some better credit here is a good little article.
[quote]jaybvee wrote:
OK: With a baby on the way & the wife & I consolidating debts I seriously want some advice on how many people on T-Nation live within their means or at least try to -
Anyone here always pay cash or debit? The wife & I are paying down our debts with a bank loan & with the little man on the way budget is going to be tight.
Anyone else having to make the same no credit card decision?
I miss the plastic but I know it’s going to be for the best…
Advice or tips would be helpful & appreciated.
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Wwe are. And it is hard - but it feels so good to know that the things we have are ours!! You can do it! Even with a baby on the way - we have four and our fifth is due in October. Two years ago we were waaaaay in over our heads in credit card debt and through the grace of God and sacrifice we’ve paid all of it off except aabout $20,000. That’'s going togo away here shortly also. We did little stuff - we stopped having water delivered and turned off the DirecTV. My hubby stopped taking his work clothes to the cleaners and I started ironing them myself. We stopped buying the kids clothes at Gymboree and get them either on sale (off season clothes are awesome) or if they need something right away we try to find something suitable at Wally world or Target or sometimes Goodwill. Goodwill is very hard for me, but we’ve survived. We also only allow ourselves fast food or dinner out once a month and have budgeted $100 for each birhtday instead of the usual $500 or whatever it took to buy them all the things they wanted. I make the kids sack lunches instead of letting them have hot lunch at scool everyday. All in all we’ve cut out around $800 worth a month of ‘stuff’ we didn’t really need.
We’re always looking for more ways to save. It has gotten easier and it’s so awesome to see the debt go away! I can’t even tell you how freeing it has been. If you believe in paying tithing to your church you should pay 10% and then pay yourself 10% (it goes into savings, IRA, etc.) every month. Then use the rest of it as your budget and do what you have to do to live that way.
If you are already going without credit cards you are doing excellent!! I don’t know if you already do all the things I mentioned (obviously you aren’t buying school lunches and kids clothes yet) but you can do other things as well. I buy all store brand stuff and we go to the food outlet stores. Honestly there are only a few things that you can tell the difference and it usually isn’t much. If something I get store brand is horribly nasty I just make a note of it and get a different kind next time. Ooh - and there are lots of places online that you can sign up for coupons for all kinds of stuff. Usually they just email them to you and you can print them out.
Have yoour wife register on the baby sites (like babycenter.com and parents.com, eetc.) they will send you so many sammples and coupons you can have more than aa years worth of formula for free (although encourage your wife to breastfeed - it’s free!). And they’ll send samples and coupons for diapers too.
Wow. I’m typing to much. Keep your chin up and keep chugging! You’ll make it and you’ll feel so good about it. It’s one less (huge) thing to worry about and it’ll get easier!!
