Yes it does, but for all of the reasons you're ignoring (or not grasping), it's still a fool's game.
Yes, you are.
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Yes it does, but for all of the reasons you're ignoring (or not grasping), it's still a fool's game.
Yes, you are.
You are spending this money anyway. There is absolutely no risk using the card and then using the money you were going to buy the items with, to pay off the card. Why exactly is this a "fool's game"? What are all these reasons that I'm ignoring? You're still spending the same money for your purchases only one way you pay as you purchase, the other way you put the exact same amount on a card and then pay at the end of your billing cycle. I'm really lost as to what the problem with this is?
Based on your previous posts of saying people don't pay off their cards, I am NOT most people. I have not carried a credit card balance in 35 years. I guess that says I only buy what I can afford. Just like paying cash.
As I've said before, 100% of people who at one point ordered themselves a credit card thought they weren't 'most people', and at one point - like you, perhaps - they weren't. But 'most people' isn't something you either are or are not when you first apply; it's what happens over time.
Life catches up, and however proud of yourself you are right now, you're in for some unexpected turmoil because that's how it works.
At that point, do you want a bill for things you thought you'd easily be able to pay (all because of that 1% cash back) or do you want to have paid it already because if you could really afford it, what's the point of a credit card?
It might seem insignificant now, but it won't when you have no income and a credit card bill.
Yes, you do keep saying this. It isn't any more convincing from the repetition though. You're way off base here. There is nothing difficult or complicated about using credit cards responsibly. You can choose to avoid the benefits but that doesn't mean that everyone else is ignoring or not understanding the situation.
With all due respect, is your comprehension that bad? I'm only putting money on the card that I ALREADY HAVE and for items that NEED TO BE BOUGHT. No different than you paying for stuff right out of your bank account.
The point of the card:
1. Easy convenient way to pay
2. Protection from fraudulent charges.
3. Cash back.
4. Bank account not affected if there are fraudulent charges.
Just admit that a credit card is a good thing for people that are financially responsible and not the ones that get one to be able to buy things they don't have the money for and can't afford.
There is no benefit here. Literally any other card offers the same thing.
Debit cards offer the same thing these days, as does PayPal and any number of payment platforms. No benefit.
That's what it boils down to, isn't it. 1%. Good for you.
My bank(s) refund the charges if it's a fraudulent charge. Once again, no benefit.
Just admit that you're in this for the 1%, which is fine, except the offset is the risk that one day your circumstances will change, maybe unexpectedly, and you'll have a bill you can't pay, unlike people who waited until they had the money who will be able to pay no problem.
You are exactly like everyone else, despite your protestations of superiority, in that nobody obtained credit thinking they couldn't manage it, but many people end up finding themselves in unexpected difficulty. If you think that isn't you, there's much for you to learn.
OK, OK, I get it. You're afraid that if YOU have a credit card, then YOU will buy something YOU can't afford and YOU will get into "unexpected difficulty".
You keep glossing over the fact that I am not using a credit card any differently than you use you a debit card to buy things I need and have the money in the bank to pay for.
Anybody with an ounce of financial responsibility can handle using a credit card without getting into trouble. You seem to think that it is impossible.
Having my "circumstances change" will not make one bit of difference in my debt. For whatever reason you can't understand this. That's fine.
I'll live my crazy, credit card using life and get a few bucks back in the process. You can continue in your fear-filled "credit cards are evil" mindset and forego the free money.
I'm not sure how a debit card would protect against something like a job loss, a pay cut or an unexpected bill. If anything, only using debit might be worse as there's no way to float purchases for a couple of weeks.
Lots of people (as in most or all) have “unexpected difficulties”. That’s called life.
Does that mean you should never have a credit card, get a car loan or take out a mortgage? By your logic it would.
It’s really strange that you believe no one can use credit responsibly. People incur debts—and pay them off—millions of times a day. Most people will live their entire life without defaulting on a credit card, car loan or mortgage.
If you want to live a cash-only lifestyle feel free, that’s your choice. Some people prefer that... awesome! But your sweeping generalizations are simply inaccurate. At least in the US, credit card default rates are something like 3-4%. That tells you the other 96-97% of cardholders can handle using their credit cards just fine—despite the occasional unexpected difficulty that may befall them.
Here are the facts: the average credit card balance in America is $6,354. The average American cannot afford to pay that off by the due date. Therefore the average credit card user is not - as you so sanctimoniously put it - "financially responsible". Maybe that's why overall credit card debt is staggeringly high and has never been higher.
Do I think it's possible to operate a credit card account without getting into trouble? Sure. I also think it's pointless. No amount of airline points or the miniscule cashbacks you're celebrating are going to change my opinion of that.
If you pay off your bill in full each month and never pay any interest, you're more responsible than the average Joe. I'll give you that. But to suggest that a change of circumstances doesn't make any difference in the way you can handle debt means you're either lacking life experience or you've not been paying attention.
I'll say it again - nobody gets a credit card thinking they can't handle it. When times get tough, it's the people without debt to pay who will fare better. This isn't rocket science. We haven't even talked about how studies show people who pay with plastic spend more.
Sure, you do whatever you want. Nobody cares. But for as long as you're creating debt in the hope you'll be able to pay it with financial consequences if you don't (rather than just freaking paying it in the first place), however much you claim to be so much better than other people, I'll keep thinking you're making a fool of yourself.
You quoted most of my post except for this:
If you and I have the same bills and you use a debit card and I use a credit card(with the money in the bank to cover it), how am I making a fool of myself?
I never claimed to be better than other people. My only claim is I only spend money that I have and I happen to put any payments that I can on a credit card to earn a few bucks. There are many people that do the same.
The average credit card balance in America is of no concern to me nor should it be to anyone that doesn't use a credit card that way. Since there are people that do carry big balances, that doesn't make make credit cards bad or evil for the rest of us. Nothing like painting everyone with a credit card with a broad brush.
I’ve earned thousands of dollars in cash back and credit card rewards. I’ve enjoyed first class, international flights to Europe and Asia all for free. In that time I’ve paid $0 in interest and never faced a credit card bill I couldn’t pay.
I have also, during that time, suffered unexpected financial hardships and even job losses. Oddly, since I never spend money I don’t already have, my credit cards were not a problem during those times.
You can obviously choose to live your life and spend your money however you wish. If you don’t trust yourself to be able to use credit responsibly then that is the best decision for you.
But I would consider myself to be very foolish if I were to have missed out on the significant and tangible benefits of using credit cards responsibly.
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This 100%. I have the equivalent of $3000 in cash back points sitting through Chase Ultimate Rewards right now. I've been using a credit card for 10 years and have never once paid a penny in interest. I've redeemed multiple first class flights over the years plus free hotels. If one is personally responsible with their money, there is no reason not to use a credit card. You literally get free benefits. I could use a debit card and get zero rewards, or use a credit card, pay it off right away and get 1-5% cash back depending on the card/purchase I am using/making. It's a no brainer.
Because the premise that it's a neutral comparison is false. This isn't a mathematical issue; it's a behavioural one. Studies show that people who use plastic end up spending more. Points and cashback is based on this premise - it's a huge money maker for the lender. You spend most with a credit card, less with a debit card and less again if you use cash.
Assuming our common aim is to enjoy wealth, you'll be just $1k richer than I am if you spend $100k to do it, based on a 1% cash return. On what planet is that a path to wealth? If your credit card debt each month is $1k and you pay in full, you'll be the grand sum of $10 richer than me.
But you're a pawn in the credit game, and I'm not. You can keep your $10.
I've never described credit cards as "evil" - you introduced that word into the conversation. But they do affect our buying behaviours, and once again, the statistics show that credit cards just don't work for most people. You might be the anomaly that pays off each month, but that doesn't negate that credit cards are something that's generated an extraordinary amount of debt for most people who own one.
I'd prefer not to support that kind of system.
I'm not concerned with what "people" do. They don't affect my finances.
Oh? I do? How do you know this? citation needed.
You're skewing the numbers here. Depending on the card I yield a lot more than 1%. Some cards offer 5% on gas and groceries. That's money I would have otherwise spent, so why wouldn't I get that 5% back? That's the planet on which the free money increases my net worth. Do you buy groceries and gasoline? So do I. The fact that it's a credit card doesn't make me want to buy more gas or drive more. My car's gas tank holds the same number of gallons and I spend the same amount of money whether I pay cash, pay with a debit card, or pay with a credit card.
True, but you have called other posters "fools" and "pawns", so let's not pretend your position is one of dispassionate mathematic analytics.
At the end of the day, your cautious nature leads you to forego potentially thousands of dollars of free money. On the other hand, some of us are choosing to avail ourselves of the free money. It sounds like none of us are abusing credit or paying interest to the card issuers.
Surely it can be possible to leave it at that without burdening the conversation with moral judgements and insults, right?
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...said most people who signed up to a credit card then had their plans go awry. Are you seriously suggesting you're somehow beyond the laws of averages? You're miraculously outside all the time-tested, observable social indicators?
https://www.valuepenguin.com/credit-cards/credit-card-spending-studies
https://www.forbes.com/sites/billha...ly-spend-more-with-credit-cards/#65cef5741c19
https://www.psychologytoday.com/us/...it-matter-whether-you-pay-cash-or-credit-card
Tell me how it's free money when you have to spend more to get it.
It might affect your buying behavior, not mine. I don't buy things I don't have the money for.
So because other people get into problems with credit cards, you don't want to take advantage of what they have to offer? I guess that's your prerogative, but I'm not going to let other peoples bad choices affect my good choices and making some free money.
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It's free because it's money you were going to spend anyway. Normal everyday expenses that you are paying no matter what. My health insurance premium, car insurance premium, phone bill, utility bills, groceries and gas go on a credit card and earn cash back. There is absolutely no reason to not put this on a card and earn some money back.
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Do the averages predict that 100% of people will have their plans go awry and encounter debt they can't pay for? Because if the averages are anything less than 100% then I am not an anomaly. It doesn't require a miracle to simply not spend money you don't have. It doesn't get any simpler than that.
Where in the URLs you supplied is the detail about my personal spending? I didn't see anything about me in the linked articles. To review, you claimed that I, personally overspend because I use credit cards. On what basis are you making that assertion?
Simple. I am not spending more to get it.
To be fair, it probably would be a good idea from a societal standpoint for people to rely on credit a lot less than they do now. Both because large amounts of debt isn't that great of a situation to be in and because merchants pay significantly less for debit cards (and possibly even cash, if they have a particularly bad credit card processing agreement).
That said, we have the system we do, so might as well take advantage--if you know you can be responsible. Also, there are significant differences in debt across different groups of people.
That said, we have the system we do, so might as well take advantage--if you know you can be responsible. Also, there are significant differences in debt across different groups of people.
This is MacRumors. Once the horse is dead we skin it and learn to play drums.
I am not sure how much a credit card would help in the aforementioned scenario beyond staving off the inevitable for a little while longer.
I am not the poster you replied to, nor do I live in the US, so I realise my attitude towards credit cards might be different from yours. I am not sure how significant this is, but I estimate I have roughly 4 years worth of savings in the bank. My country also has medisave, which is like a form of forced savings + health plan which I can use to pay for medical treatment.
Between these two, I daresay that this would allow me to better weather any storm compared to a credit card whose limit really isn’t that high to begin with, what more when I am expected to repay the principal sum with interest.
I dunno. I suppose having the option can be better than not having it, but does it not feel like one is simply kicking the can down the road here?
In the unexpected bill scenario, you'd be able to put off paying for up to a couple of months before you start getting charged interest (~30 days for the statement to come in and then another 20+ to actually send the payment). This would help if you know you'll have the full amount in that time frame. For job losses/pay reductions, that's also time that's bought while you find a new job/reduce your expenses.
With only a debit card, you're basically going into overdraft at best, and banks here aren't well known for having reasonable overdraft polices (for instance, $30+ fees every time you go into overdraft are common). Worst-case, you have to make arrangements with the companies you have bills with, who may or may not help.
Of course, ideally you'd not spend all of your incoming money every month, but the real world unfortunately doesn't allow for that a lot of the time.
This is not the point I'm making. I don't care how you handle your debt. The reality is, life can change for you at a moment's notice. You're choosing to make purchases before you pay them. Whether you have money at that point or not, makes little difference to how circumstances might change before you pay the bill, before which time you have no choice about paying it. People responsible enough not to own a credit card get to avoid the bill.
Yes there is, aside from the general lack of wisdom involved in paying for thins way after the transaction. You're delaying payment, assuming all will go well just to get 1% back. You'll probably pay more than you would have done. You can't be sure life will go as well as it is now.
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You have this backwards. It's the irresponsible people such as yourself that should not be trusted to use a credit card. The responsible people have no such concerns and don't have to needlessly deprive themselves the flexibility, cash-back, and greater protections that credit cards provide.
Your approach to spending is sort of like stopping and filling up your car at every single service station you pass just to avoid the risk of running out of gas. Because people who wait until the tank starts to approach empty can't predict what might happen in life, and they might be encouraged to drive more miles than they need to. Better to fill up every 10 miles just to be sure.
Don't forget that he's completely missing that just because someone is using their debit/checking account doesn't mean they aren't spending what they don't have. In 2017, Americans paid $34 Billion in overdraft fees.