Well, I'm trying to get some good blog material going here, but I'm afraid that there are quite a few people that sound panicky when I mention that I'm going to post their picture on my blog (aka, from group events), so to be respectful of those folks who just don't "dig it", I'm kind of blog material empty right now. *sigh* So it goes. Really, though, most of my pictures are for me, anyway, and are just a record of where life has taken me. It's just that most of you don't get to partake in all of the cool experiences that I go through in life. Soon, I'll have pics.
For now, though, let's do a poll. I am seriously thinking of going "credit card free" in life and I want your thoughts on such things. You do NOT have to post your name with this one (for privacy purposes, of course) and I'm fine with a bunch of anonymous comments! :)
Here are the questions:
Do you go through life without a credit card? How do you manage? Isn't it kind of scary to not have a back-up plan (aka, credit card) in case a serious emergency arises?
Tell me your thoughts! This is a big decision for me and it's kind of nervewracking! Again, I am fine with anonymous comments!!! I just want to hear what your thoughts are and I hope you don't feel moved to avoid this poll. :)
24 comments:
OK, I'll be brave and go first. My philosophy on credit cards is that it's good to have one for convenience. For example, large purchases over my debit card's per-day charge limit or internet purchases where I don't want my debit card number out there in internet space. However, I believe strongly in paying them off every month, so I make sure I have the money in the bank before I make the large purchases. The other convenience is cash back. :-) And, I try to avoid having a bazillion credit cards - I have one from Visa, one from Mastercard, and one from Discover, and that's it. I always decline all those store credit card offers. Plus, I can't go credit card free because I need one when I travel for work.
We have a credit card that we use for certain things [we don't go using it willy-nilly :)] but we pay off the balance every month. I think I might feel slightly uncomfortable if we didn't have one at all, just in case of emergency. One of the best things about ours is the air-mileage plan :)
credit cards are evil!...the mark of the beast....to be avoided at all costs - the cashless society is a trap meant to ensanare mankind in the shackles of the controllers!!!...Wake up before its too late!!!
I shouldn't sign this...they will find me...
My personal opinion is that credit cards are a great way to waste money! The philosophy around our house is "If you don't have the money, you don't need to buy it!" i have witnessed way too many people with six figure incomes with absolutely nothing to show for it due to the easy convenience of credit cards! So, for us it's a savings account for emergencys and strictly cash basis! It's amazing how much money you have when you aren't paying someone else for it! (Interest is not a minor expense!) Oddly enough, you find that when you are only spending the money you have you suddenly don't "need" as much as before.
Some of those with credit card woes come from being able to paying it off every month, and then a major life event happens (death, sickness, loss of job, etc) and suddenly they can't pay off the balance and WHAM they are in trouble...be wary...very wary...credit cards are evil!!!
Our household opinion is use the card but write the check to cover the whole thing when the bill comes. I use my cards like a checkbook. I don't carry my check book everywhere and can't remember my debit card pin. We each have a visa, mc and discover, we use them all the time and enjoy the cash back rewards they provide after all, my debit card and checkbook don't give cash back. Wise use is the most important thing, so above all go DEBT FREE NOT CREDIT CARD FREE.
I think it is totally a personal preference. When I was starting out on my own, credit cards are how I built my credit to A+. By paying them off ever month. You do have to have self control and discipline to control your spending on nonsense. Just make sure that you have the money before you use the convenience; check your balance regularly by phone, if you have to.
I did just cut up one of my three cards because I hadn't used it in like two years. And they show on you credit score against you if you are trying to get a loan. If you have $12000 available credit already on your cc; why do you need a loan OR are you going to use it and not pay your loan - is what the bank will say.
Again I think it all comes down to self discipline and self control. And if you can't control yourself maybe you do not need convenience. Because some people do get in trouble with cc; because lack of control!!
We just took a trip and put it all on our cc. We did have the cash in savings, but wanted to leave it there cause it's savings! And I knew that I'd be able to pay the card off in a few months. And still keep our savings.
You have to ask yourself:
Do I have enough self control and self discipline?
Am I able to manage my money like I want to if I have a cc?
Is it Too risky??
Do I panic about my finances? Then relax! ;) maybe use cash
Credit cards are not bad; it's how you use them that determines if they will be a bad thing or a helpful one.
I'm all for responsible credit card use. We use them and pay the whole sum at the end of the month. I enjoy the credit/rewards that are built up and don't have to hassle with writing a check with a kid on hip and 2 others hanging on somewhere. I wouldn't like to be without and we have excellent credit because of it! LW
Here's the problem. It is a proven fact that we buy and spend more when we are paying with anything other than cash. Reason: Have you recently paid with something in cash. It hurts! To see those green bills leave your wallet so empty!
I'm cash only. Even large purchases, it's down to the bank I go to withdraw the money THAT I'VE SAVED FOR! That's the big part. Jen - you mentioned what do you do if an emergency comes up and you don't have a credit card. Well, you have an emergency fund! At miniumum a thousand bucks. And you wouldn't believe how freeing it is!
I am a nerd. I admit it. I have not a 5 year budget, but a 10 year personal budget! Planned out on my bi-weekly payment schedule. Everythings on there. That way those yearly and quarterly bills don't "sneak up" on you. They are planned for.
Someone in a comment above said it's funny how you don't 'have' to have as much when you are going with cash. Well, same goes for budgeting. It's funny how when you plan where the money is going... you are able to afford and finance so much more!
Just remember this rule. It is a natural law that money flow from the hands of those who don't manage it to those that do.
Credit cards are nice and handy as long as they are paid off on time every month. I do remember the day of cash and check books and I don't remember any panic about money. You just didn't spend what you didn't have. There weren't as many purchases made that weren't necessary yet we lived well. My folks still mostly use cash and checks. The credit card it for the rare times....maybe to call and place an order for something. I'm confident that you can do well without one Jen, but in this day and age you might want to keep just one for that rare ocassion.
We use credit cards for everything and pay the balance off every month. We like having everything on one bill and like others enjoy the rewards program. But I will admit that it is a lot easier to spend just a couple bucks here and there because it's going to be on one big bill and you won't notice. They add up!
Reading those who plan on having the money to pay off the balances every month puts fear in my heart for all of you. I hope you all have an "emergency fund" as mentioned above. I agree with the budgeter. Having the cash and actually having to part with your money, even for large purchases puts a lot of things into perspective! I too have a budget, a multilevel budget (monthly, annually, etc.) We plan out our big purchases and little purchases and have been amazed that we have way more money for things than we ever imagined when we relied on the "paying off the credit card monthly" plan.
Best of luck on the decision!
Jen, you'll know who I am as soon as I say "Dave Ramsey" but that is who I have to quote here. It is proven that folks spend 12% more on purchases even with responsible credit card use than they do with cash. We have a society that promotes credit cards to the point where people wonder if they can do without them but there are other options. Debit cards can be run as a credit card when you can't remember your pin, cash keeps you on a budget and you will be amazed how much less you will live on and how much more you will see piling up in saving (or more available for travel, big purchases, etc.) because you will consider each purchase more carefully.As for being scared...again, Dave Ramsey's emergency fund covers that. I know it is a personal choice and I'm all for "different strokes for different folks" but I do have to say that it was a Wonderful feeling to cut up our credit card and go credit card free several months ago. And we have always been responsible - paying it off every month. Life is just great without it! A good blog post with lots of great comments to consider! Happy decision making!! :)
You know who I am too - the "other one" who is going to say DAVE RAMSEY BABY!!!!" Nothing quite as liberating as sticking to a cash only budget for me - try it out! You do spend less, save more, and live more simply. It's awesome!
Of course, we'll still love you if you choose otherwise!:)
Debt is not bad if you manage it well. It builds credit for the ex-large purchases. Try buying a house with cash; you'll be waiting a long time!! And spend way more in the long run! (ie. rent)
Money is just a rate of exchange!
And you can't take it with you!
Manage it well, so you can exchange it for what you need while you're here.
We use a credit card with rewards and pay it off each month. When you charge airline tickets for example, you get a certain amount of life insurance for the trip when you charge it. When I made a purchase of 20 folding chairs, the UPS sent them back and the company wanted me to pay freight both ways again, the credit card company took care of them for me. The chair company wouldn't return my calls and I had charged it when I ordered it...after calling Visa, I had a credit for the chairs AND the postage on my card the next month. Charging an appliance for example, gives you an extra year of warranty (for most cards). My advice would be....live like you don't have a credit card until you go on a trip...use it wisely then. You won't have to be carrying envelopes of cash hidden on your body or in your car. You won't have to be looking for ATMs to get more cash. If you buy big ticket items on credit card and pay it off when you get the bill, you get points or money back and it can add up. Some credit cards give cents back per gallon on gas purchases and groceries.
So that is my opinion for what it is worth!! You have got a lot of good thoughts on this subject.
I'll back up the Dave Ramsey fans! But don't tell him we have one credit card with zero balance hidden in a file somewhere, even though we do have an emergency fund! We rarely carry cash or right checks, mainly we use our debit cards.
I've always been a debit card or cash user (mostly, except for paying for airfare, hotels etc that I knew were going to be reimbursed by my employer) but I've recently switched to using a credit card because of the points/miles that I get with it. Here's what I do: as I use my credit card, for groceries, for gas, for meals, etc. I write down the amount in my checkbook as if I have paid cash. Then when I get the bill, I pay off every bit of the balance with one check (I actually use online bill pay, but that's another question).
It takes discipline (as others here have said) but it also means that you can rent a car when you need one (tough to do that without a credit card) handle emergencies, etc.
Be sure and tell us your thoughts, Jen . . .
I'll jump on the Dave Ramsey bandwagon here. It has been interesting to read the various comments! I always find it funny how defensive people get when it comes to money. It would seem that everyone is equally strong opinioned when it comes to credit. My experience has shown that it is not necessary to have a credit card to "build credit". You can get home loans (and not pay rent) without carrying around a credit card. Also, a debit card works for everything from renting a car to making a hotel reservation. It's the only way we go. I can't say how relieved we were when we could cut up our cards and go card free, and we too paid everything off every month!
Hmmmm...my thoughts...well, there are a lot of GREAT thoughts here in this post! I'm still piecing together what might work for me and what might not. I'm afraid that sometimes my control with the cc isn't the *best* so sometimes things tend to get a bit...hairy. However, I *really* liked Dr. BA's suggestion of writing the cc purchase amount in the checkbook when a purchase is made. That way the moola is acocunted for at the end of the month and voila...cc paid off! I do it with my bills so why not the cc!?!
I also like the thought of cc free (forever!) but I definitely have to work up to it. It seems like there are a lot of myths out there regarding cc's but a few have addressed those here, which, acutally, answered a lot of questions for me. So, for now, I will pay it off and then do the "minus the money from the checkbook" thing and until I decide to cut it up, that "precious" cc will remain in the freezer in a block of ice. :)
well it's bout time fer the 'ol woodtick frum 'sconsin ta throw hiz pinyun in fer kredut kards. i sez " git as mannee as u kin!" i gotts 62 as i rite this an they all gots plentee uf use. i jis keep gettin new ones ta pay fer the old ones!! werks kinda slick. keeps me gettin lots uf male 2. i thinks by doin that i keeps sum 3rd weeruld countrees in bussiness by havin ta keep ritin all those letters kunvinsin me to gets a new kard!they keep ritin me and eye keeps gettin new kards. werks slick! sew jen, me says don't kut back but gets more!!! kerdir kards that iz!! luv ta u. ttfn!!
Just a couple thoughts on credit cards, credit ratings, etc. From personal experience I wouldn't travel without a credit card. Way back years ago before MC/Visa/Discover - at least before I knew of them - we had an accident and totaled our car on vacation. Thank goodness for a Standard Oil card (that further dates me) we were able to rent a car and return home.
Regarding cancelling credit cards and charge accounts that aren't being used. The last time a loan officer ran a credit check on us there were several credit cards and accounts that haven't been used for some time. I made the comment "I'd better cancel them" and she assured it wouldn't be in my best interest to cancel them. She didn't explain in detail why but said that it would/could lower my credit score so it may be something you want to ask a loan officer about before you do it.
I agree there needs to be "money in the bank" to cover the monthly bill.
To each his own. I use my credit card for most purchases -all that I would be making anyway with cash if I did not have one. Like groceries, gas, as many utility bills as possible, trips, ...everything I can. But I don't spend with them on things any more than I would with cash. It all represents money - so why would I spend for something with a cc when I would not write a check for it? I like the fact that I get points that I can redeem for cash when I use it. I consider this "found money" that I save for something special. Also, I have used the extra warranty on appliances that came with buying with a credit card. I pay it off every month - find it more convenient to write one check a month than several. Obviously most people don't use credit cards in this way, or cc companies would not be in business. So, for most people it would be better to cut them up.
I agree with those that have credit cards and pay them off on a monthly basis. One thing that is cool with credit cards is that you can download your spending history into various financial tools to analyze your spending patterns. I would not travel without a credit card...especially not internationally.
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