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"Pay off your credit card balance" Most Americans will never be able to get past this one. If you can, you already know how to spend less than you earn and are
by njarboe 8y ago
"Pay off your credit card balance"
Most Americans will never be able to get past this one. If you can, you already know how to spend less than you earn and are way ahead of the game.
This advice is sort of like telling a society of overweight people to "eat less calories than you burn". True, but not very helpful.
- smsm42 8y agoI am fascinated at how credit cards are both quite a good deal and a very bad deal at the same time. If you use them right - which is mostly pay off each month - you can get nice sign-up bonuses (up to $600 is not unheard of if you're lucky), you can get 1.5-2% back on every purchase and 5-6% on selected categories, and if you're careful, you can also take zero APR longer-term loans with some credit cards (provided you pay them off properly) which helps structure unexpected spending like major appliance breaking down. On the other hand, you get unbelievably bad deal with 20+% APR if you don't use them right, and on top of that various fines for not paying on time, so if you get the wrong end of the deal, you can pay 2x-3x of the original amount. One of many things on the credit market which makes your life much easier if only you can prove you don't really need their service.
- war1025 8y agoIt's helpful in the sense that there is some amount of people at the edges, who aren't financially literate, but would like to be. To them, credit cards may have always been described as a necessity. Telling them that holding a balance is bad may be enlightening to them, and be the thing that sets them on the right path. Never underestimate the value of seemingly obvious advice.
- pbreit 8y agoThere are a lot of people who both invest and carry a credit card balance which is completely stupid.