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How many of you live paycheck to paycheck?
- Thread starter Kendo
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I guess, but if you really live abroad and are paid in the local currency, would it make sense to have a local card? For example, standard VISA/MC isn't accepted so much in Germany (maybe places that a tourist would frequent, but not at most markets/shops).
Yes, but that's not my situation. The point I was trying to make was "Annual Fees are not necessarily a bad thing."
I never had a problem with my Mastercard in Germany, but YMMV.
Most smaller places take only EC card because they don't want to pay VISA/MC/DISC 2-4% of the total sale. If you shop on at the larger places, sure they'll take VISA/MC, but you'll easily pay 2-4% more than the places that don't take it, which would negate any perceived savings. Cash is always an option, but you'll have to use a US card which would charge fees.
Even when I was paid in USD into a US account while living in Sweden, I found it cheaper to do a 40USD/month wire transfer from the US account to the Swedish and use the Swedish accounts/cards.
But YMMV.
The problem I've run into most in Europe is the vendor not accepting "swipe" cards; they'll only have the chip-and-pin. In that case I just pay in cash; my bank reimburses ATM withdrawals and doesn't charge an FTF either. I don't think I've ever run into a case of someone not accepting Visa or Mastercard if they accepted credit cards at all, even in small bakeries outside of Geneva. Oh well.
I was in Germany and Austria in 2004, and they *definitely* didn't accept credit cards in most of the places we went - I only brought my debit card at the time, but as long as it has a Visa/MC logo, it's all the same to them.
I think there was one larger convenience store/gas station that accepted Visa when we were on our way into Austria, but aside from that, I think only the shops in the hotels and larger malls accepted cards. REALLY inconvenient, so we paid in cash almost everywhere we went.
There's huge variability.
In the US, Credit Card was king and no one had cash.
In Stockholm, it was even more extreme, everything was electronic and I couldn't really even deposit cash in the bank (once I came in with 25000 SEK or about 2500 / 3000 USD and I had to fight with them to take it and not contact the police). Everywhere took CC and Debit Card. No personal checks allowed either.
Now, in Germany, it's mostly cash only. A lot of restaurants won't even take EC card (Debit card), so I usually keep a couple hundred on hand.
Interesting to say the least, especially when a tank of gas is 70-90 (90-130USD). I find the "We won't accept 200 or 500 bills" on the gas pumps quite humorous.
Also, I think you'd run into the swipe vs. chip-and-pin system problem in Germany, but not in Sweden.
For the last year, I've been living pay check to pay check. My wife lost her job last October (The business down sized and closed 15 of their 17 offices.) since then we pretty much drained our savings account and live pc-to-pc. September first this year, I got away from the state job I had (pay was crap) and landed a job as a Data Center Engineer. The increase in pay has helped us to start saving again, granted, not much but, we are getting it back.
I'm currently going to school full time (13 hours this semester and 15 next), luckily, it's all online except one class, which is a night class. I'll get my associates in one more year and maybe work on my bachelors after that.
My wife made 2/3s of our yearly income before she was let go. So, I'm sure you can imagine the hit we took. Since we couldn't afford daycare, two boys, she stays a home. I also do side jobs to get some extra money. It pays pretty good and has been the bulk of our investing back into our savings.
I'm currently going to school full time (13 hours this semester and 15 next), luckily, it's all online except one class, which is a night class. I'll get my associates in one more year and maybe work on my bachelors after that.
My wife made 2/3s of our yearly income before she was let go. So, I'm sure you can imagine the hit we took. Since we couldn't afford daycare, two boys, she stays a home. I also do side jobs to get some extra money. It pays pretty good and has been the bulk of our investing back into our savings.
Of course it's not universal advice, but I think it's a good place to start. Barring unusual circumstances, there are plenty of great cards with no annual fee. The other exception is airline cards... almost all have an annual fee, though I don't think a milage card is ideal for someone with only one credit card.
Also, FWIW, Discover Card doesn't charge any foreign transaction fees.
Meh, I'm somewhere in the middle. I'm not paycheck to paycheck, but I'm not where I want to be yet. I do have everything except my student loans paid off, and I was doing the Dave Ramsey thing and pounding on those, but I backed off recently. I have had some job security scares, so I stopped paying extra and decided to build up the savings/emergency fund. I'm at 3 months and building, though a move and car repairs have done some damage to the old savings lately. It's still a good feeling to pay for that kind of stuff with cash, rather than borrowing or putting it on a credit card.
Due to some problems I had with credit cards when I was younger, I just avoid them completely. I'm a lot more mature now, and I think I could handle it, but I would just rather not deal with them. I especially would rather not deal with most of the major credit card companies' (lack of) customer care.
Due to some problems I had with credit cards when I was younger, I just avoid them completely. I'm a lot more mature now, and I think I could handle it, but I would just rather not deal with them. I especially would rather not deal with most of the major credit card companies' (lack of) customer care.
Thank you.
It is my understanding that using a debit card does not influence one's credit score. My main concern - should I open a credit card once I get to school to establish a good credit score? Or should I continue to use debit?
Unfortunately the algorithm in a credit score is really I love debt score. Your credit score requires debt to have one. You can buy a house though really without a credit score. Any institution that does manual underwriting will give you a mortgage if you quilify with downpayment and no to little debt.
Buy everything with money, no loans or you will be working very hard for Bank of America. This is what is currently happening with many Americans today.
Best thing you can do is invest in your financial education as the current school systems offer none what so ever. Buy the book Rich Dad Poor Dad by Robert Kiyosaki would be a good start. Welcome to your financial journey.
It's interesting how everyone looks at the "perks" and not see the disaster that will happen if you deal with credit cards. Its not if... its when.
1) annual fees
2) interest
3) late fees
4) over the limit fees
5) you lose your job and not make a payment and it shoots up to 32% fee.
6) if you have an american express card from your employer and your employer goes broke THEN your liable for the balance.
7) Not dealing with intelligent life with the customer service and they make an error and charge you a fee with interest.
Really is it worth it just so you can get a free hat?
If you don't carry a balance from month to month then those things won't happen.
1. I don't pay an annual fee. Never will.
2. I don't pay interest because I pay my balance in full each month.
3. I pay my bills on time, except once, and the CC company gladly waived the fee and interest.
4. I've never gone over the limit. Never even close.
5. This wouldn't happen to me because I never spend more money than is in my bank account. I don't anticipate money coming in, for the reason you mentioned. I treat my card exactly like a debit card.
6. Don't know about this. Seems incredibly unlikely, but you might have a point.
7. I've never had any problems with customer service. I will say that Discover has been most excellent, and Citi and Chase haven't been far behind.
So no, I don't think it's a matter of "if," assuming you treat your credit card just like a debit card (which isn't hard at all, anyone with a debit or check card does it every day!).
Great advice. In fact, it's not a bad idea to set up an automatic transfer to apply some money to your CC the day before the balance comes due. Then you never have to worry about missing paying the minimum.
Yes, credit cards require responsibility. So do a lot of things in life. I drive a car, even through there's a chance I could be killed in a collision. At least with the CC I'm in complete control... in the car, someone could hit me and I'd never see it coming.
If you have poor money management, I wouldn't suggest a CC (or a CC with a very low credit limit). But for anyone with some degree of fiscal responsibility, they provide a lot of benefits.
My wife and I have jobs that aren't the most stable in the world, so we've got a pretty good sized plan B if we both end up out of work. Buying a house put a dent in the nest egg, but we're still doing okay. We also have cash buffers in the various accounts so bills can be paid without regard to when incoming money posts. It's definitely nice to not have to worry about it.
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Millions of normally functioning adults use credit cards every day. If you have even a small dose of "don't be an idiot" sense in you, you'll be fine.
Discover isn't accepted as widely as Visa or Mastercard, and their no annual fee offerings aren't as good as those from Cap1.
I concur. In 7 years I've never paid a late fee or interest charge since I pay my bill in full every month. This is possible because I do not buy anything unless I have the cash for it. I abhor paying interest for anything!
This year alone I have racked up $150 in points in which I can either get cash back or gift cards just from purchases that I would normally make (gasoline, phone, cable, gym membership). It is a nice way to lessen the hurt of the Christmas shopping bill.
So what your saying is if someone lost their job and got into credit card trouble because they now can't pay it, is that their idiots? Perhaps your right. Now they have two big problems. A debt crisis and a job crisis.
Now on the other hand if one payed with real money and not debt and then lost their job would now not get bent over by any debt. Now they can only deal with one thing... their income crises which can be sorted out immediately with a job. Immediately in the sense delivering pizzas at night or such while looking for their replacement job during the day.
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You are the rare ones. 78% of people out there do not pay their balance in full. This is according to the credit cards table of probabilities. They know this and that's why they give "free" stuff and points. In the end they didn't give it away for free. Perhaps that's why people are so ticked at big banks lately?
I know what you mean. I know a few colleagues at work who are addicted to the points that credit cards give not fully realizing it amounts to 1% cash back (and at best 5% in rare occurrences).
How many people would be excited if they were in a store and saw everything at 1% off? Not many...
Yes, because at most you should have one month's worth of acummulated credit card debt. Anyone who doesn't pay of their credit card bill in full every month is asking for trouble.
Why should people be ticked off at banks? Customers are the ones who spent too much money and can't pay it back.
People really should take some responsibility for their own spending habits, eating habits, etc. Stop blaming everyone but yourselves.