Hey guys I was just wondering if we really need credit cards. It seems like more people abuse credit cards an get in to all kinds off fiancial trouble usingthem. The high interest rate really puts people in a finacial jam when the cards arnt paid every month. Personally I have a debit card an a checkbook. Thats it.They both take money out off my bank account when I use them. Hey if it isnt there I cant spend it. It works for me. What worries me is when young people are targeted by the credit card outfits. At those ages its easy to get in to fianancial truble. My folks never had one in all the years they did business. Just didnt get believe in them. In that era if you didnt have the money you didnt buy it. Thoughts guys good an bad.

 

When I was still in college, I needed them to buy tires and such for my car (hence ending up with $1400 between two cards)

Nowadays I really don't need them for much. But they're nice to have for emergencies. One of my cards has an awesome rate- 6.99%, so I keep it around for that, or occasional splurges

 

Most credit cards that I know of don't charge any interest as long as you pay them by the due date.

The bigger issue here is the financial illiteracy of a large proportion of the poulation. Things like Adjustable Rate Mortgages, Credit cards, payday loans and check cashing are fine, as long as you understand how they work. Sadly most of the people who use them don't have the knowledge to protect themselves.

 

Credit cards are great. The thing is, most people do not know how to effectively manage their money, thats what credit cards bank on. We do not pay interest on ANYTHING as long as the card is paid off every month, which it is. If you know how to manage your money, credit cards are a good way to MAKE money as well.

So you may ask..."if you can afford to pay your credit card every month, then you have the money in the bank, so why not just use a debit card or cash?"

Thats an excellent question....here's why i RARELY IF EVER USE CASH. I have a couple of credit cards, ALL of them have 'rewards'. They GIVE me a certain percentage of credit for every cent i purchase with that card. That percentage goes to gift cards. So, with the amount of crap we purchase, stuff we NEED like groceries, etc...after a while, we have several hundreds of dollars saved up in gift card we can redeem. THATS FREE MONEY FOLKS. With that we have purchased several items including:

House stuff from bed, bath and beyond
ROOMBA vacuum cleaner
Home depot gift cards
Ace Hardware gift cards

Credit companies basically PAY YOU to use the card. ITs a great deal, and thats why i don't use cash, ill charge a 2.00 hamburger if the place will let me, because there are a couple of pennies out of that that goes to getting stuff i need for free that i wouldnt get if i paid in cash.

You can use this to your advantage if you have good freinds that will actually pay you back...offer to get the tab on your card and have them pay you back with cash, etc, etc.

Not to mention these cards OFTEN have up to 3-5% cash BACK ON GAS PURCHASES. That is a great money maker, who the hell doesnt spend a fortune on fuel?

 

The original Bankamericard (now Visa) and Mastercharge (now Mastercard) were structured to be like American Express, but for the masses. They were charge, not credit, cards. Merchants were convinced to take them (and pay huge commisions to the bank) in exchange for guaranteed payment instead of taking checks that might bounce. Debit cards really do that now.

To buy a television on credit was more like buying a car. The store would have you sign a time-payment contract at some high interest rate.

I dont remember when department store (like Sears) and the bank cards became "revolving" credit like it is today, but it has to be over 30-40 years now.

Modern life is complicated, and there are more financial pitfalls than ever before.

Jim

 

I have one credit card, that I rarely use, which requires full monthly payment and a debit card which I use for most everything.

 

It works for me too. I'll probably never have a credit-card to use regularly. I'll get one to use in emergencies down the road.

 

i use credit cards for 2 reasons, convenience and security against fraud, i am liable for zero dollars if someone steals my number and uses it.

credit cards saved my rear when going through cancer treatment, they really helped in filling those gaps that occured when i was unemployed for a year. i paid them all off already but looking back the credit cards really saved us and saved my credit.

but credit cards are just tools, used right they are great, used wrong you get what happens when you use any tool wrong.

 

I couldn't live without my credit card...just one. I use it like cash and pay it off every month. I love the convenience and the benefits...up to 50 days to pay the item off...depending on where the due date falls...extends the warranty on many items...fraud protection...records for tax purposes to name a few!!!

 

Perhaps not "need" - but they do have their place. They're basically pre-approved loans, and people have needed loans to get over bumps or gaps since forever.

But they have to be used carefully.

As for the rewards programs ginving free stuff - it's an illusion. Nothing's free. First off, with debit and credit cards making up the majority of transactions now (in dollars), retail prices have simply integrated the cost of the commission retailers pay to the banks on those transactions. Tjhos commissions integrate the cost of the rewards you can earn. Everything could have been several percent cheaper if people saved their cards for absolute emergencies.

 

They are a necessary evil...

You can't rent a car without one.. Most places use them for ID verification also..

 

I forgot- I do have a credit card I use on a regular basis.

I got a Discover card awhile back that gives me 5% cash back on my first $100 in gas every month. At current prices, that's like getting 16 cents off per gallon. So, I almost always use it for gas, then pay it off a few days later.

 

as mentioned above, i think credit cards can be a great financial tool...if used correctly... i use mine to make a lot of hotel reservations when i go to shows etc.. then just pay cash when i check in..
also, my opinion is a bit biased as i work for discover card

 

Right, but they don't. So im going to take advantage of the situation. It costs me the same whether i pay with credit or pay with cash. Ill just charge it and recoup some of that cost. As far as the economics is concerned, it is free money.

 

One of my credit cards is that same card and I use it the same way.