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Do you think your advice generalizes though? Do you really think most people who have a credit card go into debt because of it?

pimmen 9y ago
The whole idea of a credit card is that you buy something by borrowing money, because you don't have the money right now. If you do have the money, use a debit card. However, I'm not completely against debt. I think debt can be managed and healthy under the right circumstances, and as long as it's used for stuff that you need and not stuff you want. If you truly need the stuff, the time and other purchases the debt gave you (such as a student loan to get a degree for your job, or a mortgage to live close your job) will pay for themselves.
- wfunction 9y ago
  I don't think you answered my question. I'm trying to say that people use credit cards even when they have the money and aren't going into any kind of debt.
- deleted 9y ago
  [deleted]
- sjwright 9y ago
  For me, credit cards — as opposed to debit cards in their various forms — are exceptionally useful for their benefits (e.g. transaction liability, insurances, rewards schemes) which don't require you to ever pay a cent of interest. I have various credit cards and all of them are set up to automatically pay themselves off on the statement due date. I've not paid a cent in credit card interest in my life.
- kurtisc 9y ago
  >The whole idea of a credit card is that you buy something by borrowing money, because you don't have the money right now That's a false premise: it's cheaper to pay for something on 0% credit while the same money gathers interest than it is to buy it outright. It also ignores opportunity cost and could be applied to every form of credit from mortgages to business investment and government bonds.
- EADGBE 9y ago
  Not having money, and "being good for the money" are two different things.
- URSpider94 9y ago
  That's patently untrue as a blanket statement. I NEVER use my debit cards for purchases, only my credit cards. I pay all of my bills in full every month. I use my credit cards because I'm not risking the security of my primary checking account in online transactions, and also because I've collected ~ $2000 in rewards in the first half of this year alone by using my credit cards ...
Simon_says 9y ago
According to this article, yes. http://time.com/money/4213757/average-american-credit-card-debt/ http://time.com/money/4213757/average-american-credit-card-d... > Only 35% of credit card users don't carry a balance--they pay off their bill every month, like you're supposed to.
- wfunction 9y ago
  What percentage of those carrying a balance are living in debt though? Like even someone with perfect credit and means to pay would happily take advantage of a 0% balance transfer offer to carry a balance for a couple of years when he could pay it off fully. I would be curious what percentages of these revolving balances are due to a strict lack of funds rather than due to wanting to keep emergency cash on hand, or taking advantage of a sensible offer, or otherwise. That said, even 35% is more than a third of the population, which should be more than enough reason to suggest you shouldn't be telling everyone you meet not to get a credit card. The consumer protection is far greater, and it's far less risky than carrying a debit card. (I would be surprised if anyone here didn't know these already, but then I'm surprised at the advice being given.)
  - deleted 9y ago
    [deleted]
  - dzhiurgis 9y ago
    The security from credit card is FUD. If anything, it's probably less secure: 1. Users are encouraged not to care about the security as they are insured - which means spending in dodgy online stores. 2. Magnetic stripe technology is terribly insecure. Combine the both and you end up Americans being prime target of fraud, constantly (rightfully) scared of Eastern European fraudsters. Meanwhile people here in Europe never ever worried about it.
    - wfunction 9y ago
      No, it's not FUD. First, magnetic strips are already phased out in many places and continuing to be so in even more, so I don't understand that complaint. Second, see my reply to the sister comment -- even with magnetic strips they're still safer.

pimmen 9y ago

The whole idea of a credit card is that you buy something by borrowing money, because you don't have the money right now. If you do have the money, use a debit card. However, I'm not completely against debt. I think debt can be managed and healthy under the right circumstances, and as long as it's used for stuff that you need and not stuff you want. If you truly need the stuff, the time and other purchases the debt gave you (such as a student loan to get a degree for your job, or a mortgage to live close your job) will pay for themselves.

wfunction 9y ago
I don't think you answered my question. I'm trying to say that people use credit cards even when they have the money and aren't going into any kind of debt.
deleted 9y ago
[deleted]
sjwright 9y ago
For me, credit cards — as opposed to debit cards in their various forms — are exceptionally useful for their benefits (e.g. transaction liability, insurances, rewards schemes) which don't require you to ever pay a cent of interest. I have various credit cards and all of them are set up to automatically pay themselves off on the statement due date. I've not paid a cent in credit card interest in my life.
kurtisc 9y ago
>The whole idea of a credit card is that you buy something by borrowing money, because you don't have the money right now That's a false premise: it's cheaper to pay for something on 0% credit while the same money gathers interest than it is to buy it outright. It also ignores opportunity cost and could be applied to every form of credit from mortgages to business investment and government bonds.
EADGBE 9y ago
Not having money, and "being good for the money" are two different things.
URSpider94 9y ago
That's patently untrue as a blanket statement. I NEVER use my debit cards for purchases, only my credit cards. I pay all of my bills in full every month. I use my credit cards because I'm not risking the security of my primary checking account in online transactions, and also because I've collected ~ $2000 in rewards in the first half of this year alone by using my credit cards ...

Simon_says 9y ago

According to this article, yes. http://time.com/money/4213757/average-american-credit-card-debt/ http://time.com/money/4213757/average-american-credit-card-d... > Only 35% of credit card users don't carry a balance--they pay off their bill every month, like you're supposed to.

wfunction 9y ago
What percentage of those carrying a balance are living in debt though? Like even someone with perfect credit and means to pay would happily take advantage of a 0% balance transfer offer to carry a balance for a couple of years when he could pay it off fully. I would be curious what percentages of these revolving balances are due to a strict lack of funds rather than due to wanting to keep emergency cash on hand, or taking advantage of a sensible offer, or otherwise. That said, even 35% is more than a third of the population, which should be more than enough reason to suggest you shouldn't be telling everyone you meet not to get a credit card. The consumer protection is far greater, and it's far less risky than carrying a debit card. (I would be surprised if anyone here didn't know these already, but then I'm surprised at the advice being given.)
- deleted 9y ago
  [deleted]
- dzhiurgis 9y ago
  The security from credit card is FUD. If anything, it's probably less secure: 1. Users are encouraged not to care about the security as they are insured - which means spending in dodgy online stores. 2. Magnetic stripe technology is terribly insecure. Combine the both and you end up Americans being prime target of fraud, constantly (rightfully) scared of Eastern European fraudsters. Meanwhile people here in Europe never ever worried about it.
  - wfunction 9y ago
    No, it's not FUD. First, magnetic strips are already phased out in many places and continuing to be so in even more, so I don't understand that complaint. Second, see my reply to the sister comment -- even with magnetic strips they're still safer.