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I suspect the downside to using credit cards comes when you don’t pay (or can’t pay) the bill during the interest free period or at the end of each month.
by docdeek 4y ago
I suspect the downside to using credit cards comes when you don’t pay (or can’t pay) the bill during the interest free period or at the end of each month.
- tekla 4y agoHow is that different from not having the cash to buy something in the first place?
- docdeek 4y agoIt’s a downside to credit cards, as opposed to “no downsides” to credit cards.
- pb7 4y agoIt's not a downside. The credit card didn't make you spend money you didn't have, you did.
- jcranmer 4y agoIf you are physically giving up cash, it is much easier to figure out if you have insufficient cash to make a purchase. With a credit card, it is less obvious to figure out that the balance on the card now exceeds the cash you have to pay it off. It can be done, true, but it requires a level of diligence that most people don't have.
- Jochim 4y agoEven people who do have that diligence can be caught out. You do the calculation, make the purchase and a week later encounter an unexpected expense like your car breaking down, or you lose your job. You may now find yourself unable to make the full repayment despite having thought about the purchase before making it.
- Jochim 4y agoNot having the cash in the first place doesn't result in a debt with unbounded interest repayments.