Comments on: The Only Things You Should Use Your Credit Card For

By: oneadvice

oneadvice — Wed, 25 Mar 2009 16:30:29 +0000

You need to be so so careful before using your credit card for a purchase. Even if you start with good intentions it can be very easy to get yourself into more and more debt.
Interesting read though, thanks.

By: Ray

Ray — Wed, 25 Mar 2009 07:35:43 +0000

Ditto John S. I am as anti-debt as you will find but I’m a heavy card user paid off in full every month. The key point is whether you are using a card to cover something you cannot afford or if it is simply a tool to facilitate daily transactions.

BTW – don’t take the highest limits the card company will give you. Locally they restrict card limits to 2x monthly salary which seems like a lot of rope to give someone.

I’ve never racked up more than 1 weeks worth of salary on a card and have reduced my limit accordingly for security purposes. Yet even these days, the banks are are constantly pushing higher limits or the next tier… gold, black, platinum, whatever. If you really need to make a substantial purchase, there are better ways to finance yourself not to mention saving for it.

By: John S

John S — Tue, 24 Mar 2009 15:58:13 +0000

#6 reason to use credit cards:
I am not a loser and use it instead of cash because it is easier. I could never conceive of a day when I couldn’t pay the full amount at the end of the month, and if I got to that point, I wouldn’t use credit cards.

By: StocksHaven dot com

StocksHaven dot com — Tue, 24 Mar 2009 04:48:22 +0000

Great post! Pherhaps you should go on CNN and teach America how to deal with their credit crisis, professor. lol :)

By: Zack Zoomer

Zack Zoomer — Tue, 24 Mar 2009 03:22:21 +0000

@Erik – using credit for consumption is generally foolish – although, again, avoiding homelessness is key to becoming re-employed when unemployed – but smart use of credit is just as key for success in business. In fact, I would go so far as to say that without the smart use of credit in business, you will be wiped out by any competition that does use it. Credit is a tool. It can be used wisely or foolishly, but with proper training or good professional advice, it need not be feared.

By: MoneyEnergy

MoneyEnergy — Tue, 24 Mar 2009 00:20:14 +0000

Erik,

Great for you if you can avoid them altogether. After all, it’s not credit cards themselves but the fact that they are DEBT (not credit, actually, ha ha…) that makes them dangerous.

Megan,
I’m not an expert on what will actually boost your credit score. I’ve heard both sides arguing for lower or higher ratios of debt load to debt limit. I think that the more often you can pay it off within the same month, the better. Never max it. Never miss a minimum payment. Those are more important than the exact ratio, I think.

I did work at a credit ratings firm once, and trust me it is the missing of minimum payments that will most adversely affect your score.

By: Erik

Erik — Mon, 23 Mar 2009 20:05:14 +0000

My view is that credit should never be used.

Currently, laws prevent money being a factor in medical treatment and that debt has no interest when done through the hospital rather than a card. If you gotta go to the doc, you gotta go; but don’t put it on your card.

Sure if you have a card and hungry kids…my argument probably goes out the window for many. But… I would suggest turning to neighbors and learn about gathering wild food in your area rather than submit to the slavery imposed by debt. Debt will not free up assets for food next month…just the opposite.

Debt is servitude. With current debt laws, it is likely lifetime servitude.

There are no advantages to debt that are not outweighed by their consequences. Never use a credit card.

By: MoneyEnergy

MoneyEnergy — Mon, 23 Mar 2009 19:09:50 +0000

Zack, very good point, of course… I was still assuming “under normal conditions” but these are not normal times… that said it does speak to the efficacy of emergency savings — at least maybe it could provide some little buffer before one does have to dip into the very expensive credit.

By: Zack Zoomer

Zack Zoomer — Mon, 23 Mar 2009 17:57:43 +0000

Good advice, but there are a whole bunch of families out there where both parents have lost their jobs. Contingency funds run out pretty quickly when they are being used to pay the rent, and you’re not going to let your kids go hungry if you’ve got a credit card that still works.

By: Meghan

Meghan — Mon, 23 Mar 2009 14:46:33 +0000

I am the same as The Almost Millionaire. I pay off all of my credit cards every month, and also put money into savings. But, I’ve recently been told that it helps to keep a low balance on some cards to improve my credit. Is this true?