What is your opinion on credit cards?

I think credit cards are great for someone who is responsible as a convenience. They can be pretty bad if you're not responsible though because it can get you into trouble financially. When used responsibly, it is safer. It is much harder to steal and use a credit card then to just steal cash from someone. Credit cards can be canceled or reported missing and can be tracked. Money cannot be.

 

I've never had one or ever want to

 

I was anti credit cards for a long time but now that I'm looking for my first house and would like a nicer vehicle I wish I had started building credit years ago. I've always been good with money so I don't know why I was so scared of CC's.

If you are responsible then start building credit as soon as you can. If you cant handle money well then maybe they are a bad idea.

 

I use credit cards very occasionally for the benefits. I never carry a balance and I'm sorry to say I learned about late fees the hard way long ago. Today I have a "cash and carry" life and I'm paying down my secured (i.e. mortgage) debt ahead of schedule. I drive an old car that's paid off and I will never get a car with a loan again.

Since you're relatively young, if you don't mind advice from and older guy, I would say that your responsible outlook toward credit is already great. Together with that I would go a step further to create a financial plan:

1. If you're in debt, get out of it as soon as you possibly can by accelerating payments.
2. Once you're out of debt, put what you were paying toward it into savings.
3. Save as much as you can, until you see something else essential go "bump" as a result of too much savings. Sure, splurge every so often, but save by default. Simplify your savings with automatic transfers - you literally won't miss the money after a while.
4. Max your 401(k) or other retirement savings, or at least get any employer match you can. If you don't have this benefit then start an IRA and contribute as much as you can.

I know I sound like my own grandpa, but if you consistently do all of these you will have your freedom in retirement someday and you will be living large. You'll also be free of the worry and pain of debt in your working life. When the time comes, treat yourself once your nest egg is in shape.

Suze Orman is an awesome author on all of this, I recommend any of her books.

*gets off massive old curmudgeon soapbox - lol*

Patrick

 

I'm not sure if this post was aimed at me, but I appreciate it anyways. Its always good to hear from someone who has already done it.

 

I'll second all of Patrick's advise. For my husband and me, though, it was Dave Ramsey. I hate when people say a book changed their life--but I have to admit that Total Money Makeover changed our lives.

 

A bad thing about credit cards and cards in general is it makes money seem so less real and less meaningful in my opinion. I don't really ever handle cash anymore. It's all just numbers that move from one screen to another.

As far as credit cards are concerned they have you locked down. You need credit to do anything, but to get credit you have to have a card and be using it. Half the stuff you pay on every day won't help your credit but almost all can hurt your credit.

 

Credit cards (and debt in general, really) are a game designed by someone else, for you to lose.

Dave Ramsey rocks.

Patrick

 

Debit cards are fine if you're not an impulsive shopper, but if that's the case you have a problem anyway in our debt driven, consumerist society. I like them in combination with Internet banking because that way I have full control over my finances. Cash has never been my thing because it requires me to manually count how much money I have left.

Credit cards are only for rich people who don't really care how much they spend on "stuff". I personally wouldn't touch any of them even with a ten foot barge-pole.

 

If you're still a student, check out the Discover IT student. Pretty easy to get, and way easier than the non-student version. 5% rotating categories, ability to freeze/unfreeze card, U.S based Customer Service, etc. It's a good card for students.

Now for the question at hand. Personally, I love credit cards. We (AlamoCity and I) talk about them most, if not all, the time. Too much of a good thing is bad? Couldn't agree more when it comes to the realm of credit cards. I see them as a necessary component in our economy. Forget your cash and debit card at home, and know you have enough money to cover the purchase? Pull out that credit card. Want to take out a mortgage or get a low ARP on a car? Build up credit and what does that require? A credit card. You really need something now and you don't have the money but you know you will because payday is coming soon? Pull out that credit card.

Technology is making it so easy to keep track of credit cards these days that I don't understand how people miss payments.

 

I'm not a big fan of credit cards and come from a country where credit cards are still not used as much as in the US, and I hope it stays that way.

 

I think they could be very useful: when I went to Northern Ireland with my mum, our debit cards didn't work for some reason. We couldn't get money out of the cash machines or pay for stuff with them, so when we ran out of cash, my mum's credit card proved essential.
On the other hand, my history teacher told the class that getting rid of her credit card was the best thing she ever did.

 

Credit cards are great if you use them wisely. Budget better, earn cashback, make your other money work harder and stay safer.

Credit cards don't get people in debt, people with bad money management skills get themselves into debt. After a past life of ten years in banking risk management I can confirm that some people will always get themselves in bad debt, credit cards or not.

Occasionally people find themselves in financial difficulty which is completely out of their control but if you're honest with your bank they'll do their best to help you.