Survivalist Forum banner
1 - 20 of 31 Posts

·
Registered
Joined
·
1 Posts
There are only two "benefits" to credit cards:

1. You can buy something now and pay for it later.
2. It helps you build credit.

The downsides of credit cards are many:

1. Buying something now and paying for it later actually means that you are paying MORE for the item than it is actually worth. For instance, you want that pair of shoes. The shoes cost $70. Because of interest, the shoes that are $70 today, you are paying $85 for next month. And that 21% will accumulate for every month you carry a balance. So if you have a credit card with $100 worth of charges on it, paying anything but the entire balance leaves you owing another 21% every month. If you pay $50 on your $100 balance this month, the next month you will still owe $60, and that's only if you don't purchase anything else.

2. It keeps you in debt. The more credit cards you have, the more likely you are to live on credit, which means you are constantly getting further and further behind in your debt. More than a few people in this country have $20, $30,000 in credit card debt alone.

3. One missed payment on a credit card is enough to drive your FICO scores down, which means you have to work harder to bring your FICO score up in the future. And that one missed payment will follow you around for the next seven years.

4. A better way to build credit is to buy a house or by a car -- a used car that will have lower payments than a new car. When someone rolls off the lot in a brand new car purchased on credit, the $20,000 car loses nearly half of its value. The insurance on the car is also five times more expensive because you have to have full coverage on the car -- because it belongs to the bank until you pay it off.

5. I went strictly cash ten years ago. Cash doesn't bounce. Cash doesn't charge interest. You can't overspend cash. You can't go over your limit with cash. You don't have math mistakes with cash. And when you purchase with cash, you own the item outright. You might have to wait for what you want, but no one will come to repo your furniture, your car, etc., etc., and it doesn't raise and lower your credit score. Furthermore, no one can change the rules in the middle of the night, like credit card companies do. I am debt free because I only spend cash.

Furthermore, the insurance for my vehicles is $62 a month - for both of them. That means I've got an extra $300 in my pocket that my neighbors don't have because they're paying $350 for their insurance and I'm not.

If you must have a credit card -- which is a good idea for emergencies -- then let me suggest a secured credit card. A secured credit card works the exact same way as an unsecured card, except that it is tied to a savings account that is exclusively used to back the card. If you have $500 in the savings account, your credit limit is $500. If you make a deposit of $250, so that your $500 is now $750, your credit limit raises. They will send you a bill every month, and they report to the credit agencies, which also helps build your credit.

The best part about a secured card is if you ever get into financial trouble, the card can be totally paid off simply by telling the bank to pay the balance with funds in your savings account. This keeps folks from having nasty late payments and chargeoffs on the credit reports, and you can always open a new account any time you want.

Just some thoughts for you. In this day and age, the worst thing a person can be is enslaved to debt. If you ever watch that show Repo Man, whatever, on TV, you will see that credit definitely has its downsides. There are enough people in this world who are facing repo men/women every day, enough to make a TV show out of it. That should tell you how prevalent the problem is, thinking you can afford something when in reality, you can't.

One more thought: Better than 70% of the people in this country are literally two paychecks away from utter financial ruin. The more you can get along with just cash, the better.
 

·
Never Give up
Joined
·
7,579 Posts
Its a tool

Use it that way. Dont buy stuff you cant afford. Only what you can pay of when the bill comes in. We use ours all the time. But its for stuff that is normal running and the money is already there to pay for the bill. The reason for that is the points we get thru are card. We dont pay any more for anything plus we have a way to dispute items that are not received or is bad.
But never put anything on them you dont want people top know your buying. That is where cash is king.
 

·
Silent Observer
Joined
·
367 Posts
My wife and I NEVER carry a balance - the bill is paid in full when the bill comes due ALWAYS - no matter how much we charge. I am not rich, but with a little discipline and common sense ( and a wife who knows how to pinch pennies) we can do this without any hassles.

Also, we get cash back with a couple of our cards, so they pay us a little bit actually.
 

·
Registered
Joined
·
7,794 Posts
1. Don't have to carry alot of cash.

2. Don't have to fool with change.

3. Large long distance purchases are really easy and doing this can save you money.

4. More buyer's protection than a debit card.



Unfortunately it's a little too easy to abuse though.
 

·
Premium Member
Joined
·
1,313 Posts
I am glad I have a credit card.... My daughter needed an MRI.... Being that we didn't have cash up front and insurance is lousy... We put it on the card...And yes, we are paying for it now.

In our home we just purchased, (mortgage) (debt) We put in new carpet (it was very old and had to be changed) (more debt)We put $500.00 down and the rest is 0% for 3 years. As much as I hate banks, the banks are taking the risk. And yes they may have huge profits.

Last year, we bought a car...(even more debt) our other car had over a hundred thousand miles on it and had many oil leaks that couldn't be fixed. So we bought a new car at 0.9% I imagine I am one of "those" people who are 2 paychecks away from being homeless.

Lots of people start a business with a loan. Sorry I don't have the stats on that. Credit also creates work. it would be better if we actually made more things in America though.

I also bought a living room set for our new home... That I paid CASH for.On top of that it was made in America. Also in Texas. better yet It was made in Houston where I live , so my purchase gave jobs to my "neighbors" That felt great. I wish I was able to pay cash for everything. It is not always possible.
 

·
Registered
Joined
·
3,839 Posts
Benefits of a credit card ??

1. If you run across a really good deal and don't have the cash right now, you can still take advantage of the sale.

2. For emergencies, such as hot water tank goes out and you need another one right away.

3. For medical or dental care that's needed right now.

4. If you need cash right away, you can get it easily.

5. It'll help keep you out of the pawn shops.

6. Emergency auto repairs.

7. Try getting a hotel room or a car rental without one.

8. You can buy stuff online.

9. If you manage it correctly, it'll boost your credit score.

10. If your ATM machine breaks down and you can't get cash right away, you can still go out to dinner or buy gas.
 

·
keep your powder dry
Joined
·
314 Posts
My wife and I NEVER carry a balance - the bill is paid in full when the bill comes due ALWAYS - no matter how much we charge. I am not rich, but with a little discipline ...
Absolutely. Thats what I do. I mentally tie my credit card spending to what I have in the checking account. I always have paid my bill each month on time (oftentimes early). Between months and months of doing that, and having already paid off my car, Im pretty sure my credit score is doing ok :thumb:
 

·
Registered
Joined
·
98 Posts
Benefits of a credit card ??

1. If you run across a really good deal and don't have the cash right now, you can still take advantage of the sale.

2. For emergencies, such as hot water tank goes out and you need another one right away.

3. For medical or dental care that's needed right now.

4. If you need cash right away, you can get it easily.

5. It'll help keep you out of the pawn shops.

6. Emergency auto repairs.

7. Try getting a hotel room or a car rental without one.

8. You can buy stuff online.

9. If you manage it correctly, it'll boost your credit score.

10. If your ATM machine breaks down and you can't get cash right away, you can still go out to dinner or buy gas.
Some of these reasons are true but some of them are just plain no good.

2. For emergencies
We have an "emergency" fund that is never touched (well, hasn't been yet) but would only be touched in the case of an extreme emergency. AC in the car goes out? Live with it. Car blows up? Emergency fund.

Why would you want to pay 26% interest on an emergency purchase when you can just use your emergency fund at no cost?

I highly recommend Dave Ramsey's plan ...save up an emergency fund immediately and eventually build it up to cover at least 3 months cost of living (we are working on it).

I have a credit card...and it has a lot of positives. It does allow me to make a lot of purchases that are just too easy to make tho:(

~Norinco
 

·
Registered
Joined
·
34,022 Posts
Some of these reasons are true but some of them are just plain no good.



We have an "emergency" fund that is never touched (well, hasn't been yet) but would only be touched in the case of an extreme emergency. AC in the car goes out? Live with it. Car blows up? Emergency fund.

Why would you want to pay 26% interest on an emergency purchase when you can just use your emergency fund at no cost?

I highly recommend Dave Ramsey's plan ...save up an emergency fund immediately and eventually build it up to cover at least 3 months cost of living (we are working on it).

I have a credit card...and it has a lot of positives. It does allow me to make a lot of purchases that are just too easy to make tho:(

~Norinco

Here's the thing about Dave Ramsey, he tells you to NEVER use or even have a credit card. Funny thing is, try to order something from him..you guest it you MUST have a credit card
 

·
Registered
Joined
·
7,794 Posts
Here's the thing about Dave Ramsey, he tells you to NEVER use or even have a credit card. Funny thing is, try to order something from him..you guest it you MUST have a credit card
I just tried ordering something from his site to try this, thinking it was rather ironic. That's not the case though, he only accepts debit cards and checking account information for a bank draft. Interesting. I'm sure you could use a CC on amazon to get his stuff, but not from his own site.
 

·
Registered
Joined
·
34,022 Posts
I have a stack of $50 shell gas cards in my gloves box an inch thick with a rubber nad around them.

I do NOT pay for gas period! I get 6% back on all purchases and use that for free gas or whatever. I pay my utility bills, phone bill, office expenses, cable bill, cell phones and everything else through my credit card (Citi DE card)..pay the bill IN FULL several times through the Month to keep a ZERO balance and reap the benifits.

The credit card companies don't work me....I work them $$$$!
 

·
Registered
Joined
·
34,022 Posts
I just tried ordering something from his site to try this, thinking it was rather ironic. That's not the case though, he only accepts debit cards and checking account information for a bank draft. Interesting. I'm sure you could use a CC on amazon to get his stuff, but not from his own site.
Then they changed it, I read an article about that a while back and checked the site and sure enough..VISA/MC/Discover etc

I'm not a DR fan when it comes to the use of credit!
 
1 - 20 of 31 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top