Comments on: Are Credit Cards Really The Problem?

By: Diane

Diane — Wed, 30 Jan 2008 01:43:50 +0000

Hi Kyle, I agree that credit cards are not the problem. Pretty sure the card companies hate me, all I do is rack up reward points and pay off the balance. I avoid overspending by paying off charges as soon as I make them (online bill pay makes it super easy).

As for using a debit card online…as long as it has a Visa or Mastercard logo, they can process it the same way as a credit card on their end. However, the downside is that you’re giving an online merchant direct access to your checking account…so if there are fraudulent charges, good luck convincing your bank to put money back into the account. Credit cards offer much better fraud protection.

By: T.

T. — Tue, 29 Jan 2008 14:19:35 +0000

I have two cards: Amex Gold with Rewards and a Platinum Visa.

I have a recurring charge on the Amex for a monthly gym membership and a card protection plan. That’s it. When I use it, I use bill pay to send the money right back.

The Visa is a different story. I have balance on it less than $1,000 but I also have EZ-Pass linked to it and I have my iTunes tied to it. But the charges on it now are more household charges than my personal ones. For my personnel, I do the same as I do for my Amex. Sent the money via bill-pay shortly after I use it.

Credit Cards are to me a necessary evil. Necessary in case of emergency or to book things in advance or for a low recurring charge that you have but Evil if you abuse them or use them as a crutch…

By: Kyle

Kyle — Tue, 29 Jan 2008 00:11:30 +0000

Mark, interesting, thanks for the comment. My mind works a little different I guess, because I would have a hard time breaking a $20 to buy snack food. So when I was trying to get out of CC debt I carried only cash, then when I learned how to handle my finances responsibly then I was fine with CC or cash and I usually, not always, could avoid the temptation of blowing it on crap I did not need.

By: Mark

Mark — Mon, 28 Jan 2008 22:24:39 +0000

I am the opposite way with CC’s. I track every dollar I spend at the end of the month by categorizing every item on my CC statements in Quicken. If I overspend on some category (like eating out, or toys for myself) I feel guilty about it. But if I have cash, I will spend it on stupid little things like drinks and snacks when I’m at work. If I have $20 in my wallet for a week I will spend almost all of it on snacks.

But I would feel stupid for putting a 75 cent candy bar on a credit card, even if I added a $1 soda. If I don’t have cash I just don’t buy those things. It’s better for my budget AND my belt size.

By: Livingalmostlarge

Livingalmostlarge — Tue, 22 Jan 2008 16:33:30 +0000

I am trying the CC non-usage for a month. What happens if you are a super cheapskate who refuses to spend money period and ends up not spending any money at all because you are doing cash? I did only 2 cash categories eating out and groceries.

Turns out I spend even less using cash, sadly, I know I’ll spend way more next month to make up for it. Why? Because I don’t want to spend cash, I try not to grocery shop. Hence I have been eating out of the pantry, well problem?

When I finish the month, I have to restock the panty and grocery shop next month because I don’t have enough food to last for 2-3 months without shopping.

So all I did was keep my cash to look at, eat my food, and instead now I’ll use it next month to buy a TON of food which is absolutely necessary.

By: LJ

LJ — Mon, 21 Jan 2008 19:27:32 +0000

I agree with Lynnae to some extent

If a person has a hard time controlling spending, a debit card would work quite well for them.

I prefer credit cards for things like reservations and online shopping, because it is not tied directly to my checking or savings accounts, so in the off chance of theft or a billing dispute, my CASH is safe.

I like the idea of rewards programs as well. We pay our balances in full each month, so we can actually EARN money instead of losing money on interest charges.

I think the key to using credit cards responsibly is actually understanding how they work and not spending more on a card than you would with cash in hand.

Take Care

By: mom2fur

mom2fur — Fri, 18 Jan 2008 20:23:09 +0000

First, thanks for visiting my blog! Second, I have to agree with you–it isn’t money or credit cards that gets you in trouble, it’s lifestyle. This is why some people who win the lottery blow it all and end up miserable. I have learned to be frugal, and I’m slowly paying down a debt. The last time I got myself into this fine mess, I got a windfall that took me out of it…except I never learned to be frugal so of course, the old habits were still therem, and I wound up in trouble again. But now I am so much wiser (and older, I guess I have to admit)–if I ever do pay off this debt, I am much more unlikely to get into trouble again!
PS–regarding shopping on line w/o a CC–there is something called “Bill Me Later” that is accepted by a lot of sites, where they trust you will mail them a payment after the item is shipped. Paypal is another way to shop without a CC.

By: Kyle

Kyle — Fri, 18 Jan 2008 16:24:12 +0000

@ Meg, thanks for adding pluses of using credit cards. My sister who lives in Australia, uses airline credit card miles to pay for a trip to the US every year. Great bonus.

@ Lynnae. Just curious, do you shop online, if so, since you don’t have a credit card, what payment method do you use? It has been my experience that you can’t use a debit card to shop online at the few stores I have checked.

By: Lynnae @ beingfrugal.net

Lynnae @ beingfrugal.net — Fri, 18 Jan 2008 05:21:07 +0000

I just cut up my credit cards, and it felt great! I don’t think credit cards themselves are bad, but I think some of the practices that credit card companies use to try to get more of your money are reprehensible.

I believe you can use a debit card with a visa or mastercard logo to do any of the things you mentioned.

By: Meg from The Bargain Queens & All About Appearances

Meg from The Bargain Queens & All About Appearances — Fri, 18 Jan 2008 03:24:16 +0000

While I did cut my major credit card, I certainly don’t have anything against credit cards in general and it’s nice to see someone pointing out the plus side. In fact, I’m very grateful that there are such things as credit cards because otherwise I couldn’t enjoy so many nice things right now.

Other pluses:
* Rewards points
* Longer warranties on items purchases
* Ability to dispute charges if there are problems with the purchase
* Ability to automatically keep track of purchases to some extent

So why did I cut mine up? Basically, just to make it harder for me to go spend money. I have a debit card for necessities and another credit card for emergencies only. Also, I found out that PayPal still has my account info (though I deleted it on Amazon). So, I can still spend plenty. But it forced me to change my habits.