Credit Card Debt

[Olbidness]

I have'nt used a credit card for 1 year, only a debit card. I have seen no problems yet. I rented a car, bought plane tickets, bought things on line, ect. without a hitch.
The upside is I have no CC bill to pay. The downside is I don't get reward points, but I have never seen anyone get rich off of reward points. MC and Visa give the same protection to debit cards as CC.

I really don't have a high opinon of the CC industry, and I don't want to play their game.

 

[ERD50]

I really don't have a high opinion of the CC industry,

me either!

and I don't want to play their game.

I like playing the game. I charge every purchase I can, I get to wait about a month to pay for those things, and then... they give me money!

What's not to like about that game?

-ERD50

 

[W2R]

I have'nt used a credit card for 1 year, only a debit card. I have seen no problems yet. I rented a car, bought plane tickets, bought things on line, ect. without a hitch.
The upside is I have no CC bill to pay. The downside is I don't get reward points, but I have never seen anyone get rich off of reward points. MC and Visa give the same protection to debit cards as CC.

I really don't have a high opinon of the CC industry, and I don't want to play their game.

I couldn't agree more! Apparently there aren't many others here that agree with us, though. I love not having to start one of the many threads on this board about how my CC company has raised rates, changed due dates, or whatever (since I don't even have a CC any more, other than my work CC which I do not use except as required for work). Not have a CC simplifies my life, and that is worth something, too.

 

[ERD50]

I love not having to start one of the many threads on this board about how my CC company has raised rates, changed due dates, or whatever... Not have a CC simplifies my life, and that is worth something, too.

In the many years that I've used two cards each and every month (not everyone accepts my main AMEX card, so I carry a Visa/MC which gives amazon points that I always end up using), I've never had any sort of problem like this. I charge every penny I can, for the delay in payment and the x% rebate.

Most of that will never apply if you pay it off each month (they could charge 100% interest for all I care).

-ERD50

 

[W2R]

In the many years that I've used two cards each and every month (not everyone accepts my main AMEX card, so I carry a Visa/MC which gives amazon points that I always end up using), I've never had any sort of problem like this. I charge every penny I can, for the delay in payment and the x% rebate.

Most of that will never apply if you pay it off each month (they could charge 100% interest for all I care).

-ERD50

What a coincidence! I've never had these problems, either, and I don't have to be concerned about such things. Credit card hassles are just static in the background of life as far as I'm concerned. Frank always pays his off each month, too, but the aggravation he has gone through is enough to deter me from going that route. In fact, just listing the hassles in this thread is way too much aggravation for me, even though he hasn't paid a cent in interest yet!

After this thread began, I thought briefly of taking your route and opening a PenFed CC account as was recommended in the spin-off thread. I went there, and the first thing I saw was something about having to have an account. No way am I going to open up a bank account and put perfectly good money in it, for that. Too much complication for me.

 

[ziggy29]

Folks, a decision about whether to use credit cards (and pay them off each month) or avoid them entirely is just like the "rent or buy" debates and the "pay off debts or invest" debates.

Different strokes and all, and I don't think anyone is going to be "persuaded" to reconsider their positions.

 

[W2R]

Folks, a decision about whether to use credit cards (and pay them off each month) or avoid them entirely is just like the "rent or buy" debates and the "pay off debts or invest" debates.

Different strokes and all, and I don't think anyone is going to be "persuaded" to reconsider their positions.

Maybe we should start a poll: Have you paid off your mortgage? (yes, no, working on it).

 

[ziggy29]

Maybe we should start a poll: Have you paid off your mortgage? (yes, no, working on it).

Complete with the "peace of mind" argument versus the "you can't eat your house" argument!

 

[FinanceDude]

Complete with the "peace of mind" argument versus the "you can't eat your house" argument!

On a side note to that, a comment made by someone I knew that worked in F&I at a delaership. In explaining to an irate customer why they couldn't buy a used car even though they recently purchased a house:

"Because the bank knows you can live in your car but you can't move your house"...........

 

[bbbamI]

"Because the bank knows you can live in your car but you can't move your house"...........

Actually you can, it would just be hard pulling up to a drive-thru...

 

[Notmuchlonger]

Paying off your mortgage is obviously better..

 

[Alan]

After this thread began, I thought briefly of taking your route and opening a PenFed CC account as was recommended in the spin-off thread. I went there, and the first thing I saw was something about having to have an account. No way am I going to open up a bank account and put perfectly good money in it, for that. Too much complication for me.

This put me off as well, but then as well as the CC PenFed also had great CD rates so I opened an account. I have $50 sitting there and it is well worth it for both the CC and the CD's. The CC cash rebate gets credited every month and for 2008 I had $648 in total.

However, I am fully behind everyone who prefers not to own a CC. I can definitely see the advantages of not having one. Horses for courses...

 

[ERD50]

Folks, a decision about whether to use credit cards (and pay them off each month) or avoid them ...

Different strokes and all, and I don't think anyone is going to be "persuaded" to reconsider their positions.

Agreed. Just to be clear (in case you were referring to me), I'm certainly not trying to persuade or convince anyone to stop using cash, or to stop using a debit card and get a credit card. They should do whatever works best for them, which may well be different from what seems to work best for me.

However.... one of the reasons I come to this forum is to learn from other's experiences, and in turn to share some of my experiences which may help someone. And I'm trying to understand what these supposed hassles/problems are with credit cards. I have not experienced them. Have I just been lucky? Is there something I need to watch out for that I am unaware of?

... I love not having to start one of the many threads on this board about how my CC company has raised rates, changed due dates, or whatever ... Not have a CC simplifies my life, and that is worth something, too.

So, can anyone point me to these 'many threads' about credit card problems for those who do not carry a balance? And I'm not talking about a failure to pay on time or anything that is in my control, I think I've got myself covered pretty well there (automatic payments set up and verified). I've saved more than a few thousands of dollars with cash back rewards over the years. I'll give it up if there are some real issues, but I'm not interested in giving up those benefits w/o understanding what these risks are.

So can anyone help me out here - what are the dangers?

TIA -ERD50

 

[RonBoyd]

However.... one of the reasons I come to this forum is to learn from other's experiences, and in turn to share some of my experiences which may help someone.

Exactly! My reason for being also.

So can anyone help me out here - what are the dangers?

What he said.

 

[REWahoo]

So can anyone help me out here - what are the dangers?

TIA -ERD50

I see no mention of 'dangers' prior to your use of the word.

What I do see is a couple of posters who don't use credit cards as they apparently perceive the convenience and/or savings doesn't offset the hassle of paying the bill or dealing with the CC company. While I don't happen to agree with them, I don't see them claim using a CC wisely as being dangerous.

Or are you attempting to start a do/don't pay-off-the-mortgage-early-and-buy-an-immediate-annuity-and-buy-only-index-funds discussion?

 

[Alan]

So can anyone help me out here - what are the dangers?

Like you, I charge everything I can to 2 CC's, pay them off every month and have automatic payments set up to avoid missing a deadline and incurring late fees etc. I don't think you and I will have any issues.

The biggest issue I have personally had was over 10 years ago when I got my daughter a credit card for going to college with a $500 limit - this was in the days before Visa/MC debit cards - it just seemed much easier for us to manage than her having cash. (It was also in the days before easy and no-fee online banking and easy money transfers).

It worked great for the first year until she accidentally went over the limit which in fact was not a limit, but a threshold at which we got hammered with additional fees.

PS

Both DD and husband now use use debit Visa cards. DS also uses debit card only

 

[BLS53]

I'm curious about those that don't have a credit card, mortgage, or car loan. What do you do to maintain a FICO score? Or is this not a concern, because your net worth is such, that credit reports are irrelevant?

 

[mews]

I don't have a mortgage, anymore. Paid off! (wait, that's a different thread...)
I don't have a car.
I do have a credit card that gets very little use.

Why should I arrange my life to please some rating agency somewhere? It is enough of a PITA pleasing my b*sses at work.

(In a way, it is like answering the phone at home. If I'm doing something else, too bad. The phone serves me. I do not serve the phone.)

ta,
mews

 

[W2R]

I'm curious about those that don't have a credit card, mortgage, or car loan. What do you do to maintain a FICO score? Or is this not a concern, because your net worth is such, that credit reports are irrelevant?

I don't know what I do, other than pay my bills by automatic bank draft, so they are always on time. My credit scores were in the lower 800's the last time I checked, though I am not quite sure why. I don't have any debt, and no intention to acquire any, but I guess a low FICO is still nice to have in order to get lower insurance premiums.

 

[calmloki]

I understand the attraction of not having a credit card - went for many years without - shoot it griped me to have a checking account and not earn interest on my money - for the few bills i couldn't pay in cash money orders were more cost effective. I still enjoy paying cash for some stuff - but i dislike coins inna pocket, so change is an issue. I like the way cash doesn't leave a trail for marketers to view to check my spending habits. I like having a nice chunk of cash around just in case - frankly, i like the privacy cash gives - one of the reasons i never got a tattoo - should i take to a life of crime or secret agentry i didn't want to leave a big trail or have identifying marks. The attraction of the debit card vs. credit card escapes me, but that's ok - we all have our little pecadillos ('specially the texans, who first crossed the peccary and the armadillo).

 

[bssc]

Maybe we should start a poll: Have you paid off your mortgage? (yes, no, working on it).

Anarchist.

 

[bssc]

I can't vote in this poll.

I am currently carrying balances on 10 cards, but I am also not paying interest on any of them. They are all 0% teaser offers that I plan to pay off when the balances come due (generally in March through May of next year).

2Cor521

Yes, I enjoyed seeing your App o Rama on FW.

 

[bssc]

I don't have a mortgage, anymore. Paid off! (wait, that's a different thread...)
I don't have a car.
I do have a credit card that gets very little use.

Why should I arrange my life to please some rating agency somewhere? It is enough of a PITA pleasing my b*sses at work.

(In a way, it is like answering the phone at home. If I'm doing something else, too bad. The phone serves me. I do not serve the phone.)

ta,
mews

But you have insurance on your house and FICO is used to the insurance agencies to determine your rate. So the better the FICO, the more money you save.

 

[mews]

bssc, I own a coop apartment in NYC. My annual insurance is $289.00 / yr. Doing a major dance to save $15.00 or so - not cost-efficient for me.

ta,
mew

 

[ERD50]

I see no mention of 'dangers' prior to your use of the word.

I was just asking the question - you are right, I guess no one in this thread described it as a 'danger' - but I'm trying to figure out what is in these 'many threads' that were alluded to. With a quick search I only came up with issues where people caused some of their own problems (late or under payment), or having unused cards cancelled.

Or are you attempting to start a do/don't pay-off-the-mortgage-early-and-buy-an-immediate-annuity-and-buy-only-index-funds discussion?

Nah, just like I said - I'm trying to learn.

I'm getting hundreds of dollars a year in benefits. I fail to see where the "hassle of paying the bill or dealing with the CC company" (I'll avoid that trap by quoting your words, OK?) comes into play when I have auto-payment set up. I have not experienced any hassles. My credit limits are about 4X my biggest bills, and over 10x my typical bills.

Now (this is where the LEARNING part comes in): just because I have not experienced the problems, does not mean they are not out there. Maybe I am just unaware. So, in good faith, I am asking - what are these supposed 'issues' (safe word?).

Let me try again ( with kid gloves this time ) ...


So can anyone help me out here - what are the [-]dangers[/-] potential issues for a credit card user who has set up auto payments to avoid late fees or underpayment?

Once I understand what these possible potential issues are, I can use that info to make a reasoned decision for *myself* (no one else) whether the benefits I get are worth these potential issues. Others could evaluate their personal situation, based on how that info might relate to them.


-ERD50