How do you use credit cards?

synthy ↓

Yesterday at 9:46 pm

I’m trying to understand why certain financial advisors are so hellbent against credit cards. Do most people not use them responsibly? I use my cards like I would a debit card, and it gives me perks such as special discounts and of course points. I never have to pay interest, I’m not maxing it out and then paying the minimum for years like they make it sound that it’s what most people do. What’s the big deal? Am I bound to one day fall into tremendous debt unknowingly?

BusyBoys

Yesterday at 9:52 pm

Because you seem to be fundamentally financially responsible.

Credit cards are a very easy target and trap for those not so disciplined.
So, someone going to financial advisor is generally looking for guidance on fiscal discipline- getting rid of the cards is a very obvious step in the right direction for them

MiracleMama ↓

Yesterday at 10:20 pm

synthy wrote:

Yes.
That's how those companies stay in business (and make a gazillion dollars).

↑ synthy ↓

Yesterday at 10:22 pm

MiracleMama wrote:

Yes.
That's how those companies stay in business (and make a gazillion dollars).

That's so interesting though. I guess I have to thank my parents for my financial education, it never occurred to me that people just use credit cards as free money.

amother

IndianRed

Yesterday at 10:23 pm

They claim that it's been documented that people spend 18% more when they use credit cards. That's why they're against it.

For me, honestly? I don't think I overspend. Maybe I'll buy a bar of chocolate (is that 18% of my food bill?) because I'm not counting pennies, but I do want that chocolate bar.

And also for me, there were years I didn't use credit cards but we were so tight that we sometimes bounced checks. Bounced check fees are way more than interest on a credit card...

↑ MiracleMama

Yesterday at 10:25 pm

synthy wrote:

That's so interesting though. I guess I have to thank my parents for my financial education, it never occurred to me that people just use credit cards as free money.

Not free money. Far from it. Irresponsible use of cc ensures that you pay far, far, far more than the worth of the things you buy for the privilege of getting things you can't afford right now.

amother

Midnight

Yesterday at 10:26 pm

I think I spend more than I would've spent using cash, but I'm pretty responsible and dh is even more responsible than me. We pay our statements in full every month and get amazing benefits, which is why we use credit cards to begin with.

amother

Whitewash ↓

Yesterday at 10:30 pm

I used it very responsibly also and paid it off every month until we started having financial troubles and we’re now in crazy debt!
If I can go back now, I would not use credit cards for anything! Even if I can afford to pay it all

↑ synthy ↓

Yesterday at 10:31 pm

I don’t think I spend more with CCs, but if I didn’t have them I’d have to push off purchases to the end of the month because my checking acct is low at the start of the month after paying rent. So it’s just a lot more convenient than debit cards.

↑ synthy ↓

Yesterday at 10:32 pm

amother Whitewash wrote:

What would you have done differently had you not had credit cards? Starve? You’d probably need a loan to survive anyhow.

amother

↑ Whitewash

Yesterday at 10:36 pm

synthy wrote:

What would you have done differently had you not had credit cards? Starve? You’d probably need a loan to survive anyhow.

I would have never gotten myself into the trouble that I’m in now. U only buy what u can afford. But when u have credit cards, it’s a lot easier to spend when u don’t have the money

↑ synthy

Yesterday at 10:49 pm

amother Whitewash wrote:

I would have never gotten myself into the trouble that I’m in now. U only buy what u can afford. But when u have credit cards, it’s a lot easier to spend when u don’t have the money

I use a budgeting app. If I see I can only have 6k income by the end of the month and I’ve already spent 5.5, I know I can’t buy anything that’s not super important.

amother

Cinnamon

Yesterday at 10:52 pm

synthy wrote:

That's so interesting though. I guess I have to thank my parents for my financial education, it never occurred to me that people just use credit cards as free money.

Some people need to use CC to pay for food. My father also taught me not to use cc like free money but I have $65 to my name and I have to decide how I’m going to divide that between upcoming bills and buying food for shabbos

sequoia

Yesterday at 11:05 pm

Yeah, I’ve always found this advice to be bizarre. We live in a digital age. In many places you can scan and buy with your phone. Credit cards give you points, convenience, and fraud protection. I’ve successfully disputed charges. I pay the balance every month (obviously). What exactly would be the benefit to getting rid of it? And then what? Carting cash around? Well I order everything online so already that wouldn’t work.

You can be sure Dave Ramsey himself does not live like this.

amother

Chocolate

Yesterday at 11:45 pm

I used my CC responsibly for a long time. Until we were hit with a lot of seemingly urgent and unavoidable expenses (uniforms, basic Shabbos food, gas, etc.) and the expected income got eaten up by more unavoidable and urgent expenses (appliance breakdowns, popped tire) and things spiraled quickly.

I wish I had only had one credit card, and only one with a $750 (or around) limit. That's enough for car rentals, online purchases, and true emergencies, while not giving too much room for overuse.

Now that credit cards are no longer an option, I've learned that a lot of our urgent and unavoidable expenses were not as urgent and unavoidable as I had thought. I learned that Shabbos can be made even simpler and still be nice. Even though I wasn't splurging excessively before, I've learned to make do with much less when there is no money.

Credit cards were also not good for working on my bitachon. When I spent on the CC supposedly because I had bitachon Hashem would give me money to pay it, I was just kicking the can down the road, not truly having bitachon that I could pay the bill. I should have been working on bitachon every time I needed something that Hashem would give me what I need.

amother

Denim

Today at 12:45 am

I have always used a credit card. If I’m honest, I probably lose cash when I have it.
I currently have a debit card due to FMLA and I am finding myself thinking of the debit card as free money to get rid of. It’s terrible. I am finding myself making more impulsive purchases than ever before.