first time I used my credit card :(

[Fluffy]

I was forced today to use my credit card for the first time, I went to put fuel on my car, and loaded 30€.

 

When I went to pay I discovered that I only had 400 US$, 30.000 yen, 20 swiss franks and a 10€ casino chip to pay with O_o

[Gerben42]

lol you travel too much :rolleyes:

[H_KARLUK]

Well amigo, great :)

 

In USA i prefer to pay cash for fuel. In case paid by card a bit expensive. (for example : 2.46 cash and 2.55 with card for regular).

 

Seems you are rich than me :rolleyes:

 

Suerte

[jdonn]

You all know there are lots of cards that give you money or other free stuff when you use them, right? Free money? Use your credit card for everything you can and just pay it off every month.

[luke warm]

You all know there are lots of cards that give you money or other free stuff when you use them, right? Free money? Use your credit card for everything you can and just pay it off every month.

absolutely... and a lot of bank debit cards give cash back...

[Gerben42]

Around here, paying by credit card is the same amount as paying in any other way. I don't like paying cash a lot, since you need to have cash for that and it gets you coins which make my wallet heavy.

[H_KARLUK]

You all know there are lots of cards that give you money or other free stuff when you use them, right? Free money? Use your credit card for everything you can and just pay it off every month.

Sorry ?

 

Is not it a bad way for most people ?

 

First, you pay a yearly and/or monthly fee for credit cards.

 

Second, most people cannot afford to pay off the full balance.

 

They might have good intentions, but in the end too many get into trouble and end up with large balances that they can never pay off.

[jdonn]

First, you pay a yearly and/or monthly fee for credit cards.

No you don't, there are lots of free cards that have reward programs that give you cash back. They are very easy to find.

 

Second, most people cannot afford to pay off the full balance.

Huh? We are talking about someone who was going to pay cash for something. If you are paying $100 cash for something but you put it on your credit card instead then you can afford to pay off the balance because you have the $100 cash you didn't use.

[Winstonm]

Put it all on Red.

[Al_U_Card]

By using only my no-fee credit card, (Air miles rather than cash back) I also took my bankcard monthly debit fee from $12 to $4 per month. (Fewer options here in the GWN :D )

[H_KARLUK]

First, you pay a yearly and/or monthly fee for credit cards.

No you don't, there are lots of free cards that have reward programs that give you cash back. They are very easy to find.

 

Second, most people cannot afford to pay off the full balance.

Huh? We are talking about someone who was going to pay cash for something. If you are paying $100 cash for something but you put it on your credit card instead then you can afford to pay off the balance because you have the $100 cash you didn't use.

I bet he knows what happens in real life-- people get that credit card and they don't think of it in terms of "pay it off each month", they can't help but charge things that they would not normally buy with pure cash.

 

Plus credit cards are almost never free-- first you have to have great credit to qualify to get one (most don't) and second the moment that you don't pay the full balance, you pay interest, sometimes very high interest.

 

His method can work, but *only* for those with excellent credit who also pay the entire balance every month, and only with credit cards that charge no yearly or monthly fee. That might be 5% of the population :D

[jdonn]

You need great credit to get a credit card??? Do you live on some other planet than mine? It's absurdly easy to get one, including with no fees. College students with no credit get them all the time. A sock puppet of a dog smoking a cigar could easily get a credit card.

 

And you are repeating this argument about not paying off the balance. The suggestion was originally, and still is, as a substitute for cash transactions. So it only applies to people who can pay off their cards.

[barmar]

HK may not live on another planet, but he is in another country. I'm sure there are countries where it's not as easy to get credit cards as it is here in the US (which may explain why excessive credit card debt is an epidemic here), and maybe HK is from one of them.

 

And even if you can afford to pay for that tankful of gasoline, that doesn't mean you can afford to pay off your card in full. Maybe that same month you made some other large purchases, or you already have a large balance on the card from previous months. Once you get into debt, it's difficult getting out of it, and then interest causes it to get worse.

 

I've always used credit cards just as a convenience, to avoid having to carry large wads of cash around, so I always pay off in full. There have been a handful of times when I misplaced the bill and forgot to pay it, and just once when I paid less than the full balance on purpose, because my checking account balance was a little low that month, maybe because I'd just paid my taxes or something like that.

[kenberg]

I was forced today to use my credit card for the first time, I went to put fuel on my car, and loaded 30€.

 

When I went to pay I discovered that I only had 400 US$, 30.000 yen, 20 swiss franks and a 10€ casino chip to pay with O_o

Now, when using cash in the states, "when I went to pay" is before you pump.

 

But most now use plastic. For everything. I got to the grocery store. I swipe a "bonus card" that gives me lower prices on many items. On a $200 grocery bill there could well be a $30 difference from using the bonus card. Then I swipe my credit card through to pay the bill. I get a rebate at the end of the year on my charges. Then I go fill my tank at the gas pumps, owned by the grocery store. Having used my bonus card in the store, I get bonus points that reduce the price of gas. The last time I filled the tank I got 40 cents a gallon off. And of course I pay at the pump with a cc, adding to my end-of-year rebate.

 

 

Is all this good? I dunno. But I sometimes feel like a trained seal, barking for fish. Produce the plastic like a good boy and we give you a discount. And somehow, with all these rebates and discounts, the stores and credit card companies are still doing well. All that profit that they are raking in is coming from somewhere, so excuse me if I am a little skeptical about all the savings I am getting. Compared to what happens if I don't use the damn stuff, yes, it's a significant savings. And then there are all these damn coupons. Again you can easily save $20 on a grocery bill by bringing them in. Yuk. I suppose that just lowering the prices and skipping the gimmicks is a really stupid idea.

[Rain]

I couldn't get a CC the first few years I was in USA to save my life. All those FF miles...evaporated.... But once you get the first one, then it becomes easy to get more. College students are the one group that's specially targeted, because apparently card companies want to grab brand loyalty when in college, and they figure parents will always bail out the students(?)

 

But totally agree with trying to use a rewards cards to get miles or cashback or whatever. (Unless there's a cash discount of course, but even then...hate carrying cash.)

 

Of course, my perfect payment record was recently ruined. Forgot about a recurring charge on a cancelled card! So credit score is going to get dinged, ugh. With great risks comes great rewards. :rolleyes:

[kfay]

My brother is one of those people who accumulates a lot of debt on his credit cards and, instead of paying off the balance, rolls it over onto some new 0% APR account and parlays the money into an investment account.

 

Of course he's got an awesome job so can assume the risk but he tells me he's in the black at this point, even considering everything that happened last year...

[ggwhiz]

In the mixed pairs at the world championships a few years ago, a woman was informed by the Director that her revoke was established and there would be a penalty at the end of the hand.

 

She asked, "What's the conversion rate?"

[helene_t]

So you get a credit card that costs you nothing in use as long as you pay the balance at the end of each month. Yet someone has to pay for the card-readers, the cards, all the administration, the interests of the 0-4 weeks you borrow the money, plus the losses related to those customers who never pay off the balance.

 

It's not you who pay those costs. It certainly isn't the credit card company either. So I suppose the shops get screwed, and the other customers (who forget to pay the balance or fail to pay it on time for some equally stupid reason) get screwed, too. With many of those financial nonsense products it's the revenue service that gets screwed but I suppose that doesn't apply here.

 

In any case, I refuse to participate in such a game. Credit cards are unsafe and too expensive to use (even if it's someone else who pays the costs).

[Fluffy]

its not only others who pay, shops certainly pay, but since they pay, they also make the customers pay a part of it.

[jdonn]

In any case, I refuse to participate in such a game. Credit cards are unsafe and too expensive to use (even if it's someone else who pays the costs).

You are taking a strong moral stand which is financially illogical B) Everyone else paying for something that you can use to your benefit is a good reason to do it, not a good reason not to.

[jjbrr]

I attended a lecture given by Dave Ramsey on the subject. He adamantly suggests never using a credit card ever.

 

Obviously if you can't pay off the balance every month, it's retarded to use a credit card because of penalties.

 

Obviously if you're so rich that the present value of your cash is substantially higher than the future value, credit is a clear choice.

 

If you're somewhere in between, perfectly sound arguments can be made for both sides.

[Echognome]

Why it may be rational to spend more than you currently earn:

 

http://en.wikipedia.org/wiki/Permanent_income_hypothesis

 

Who bears the burden of credit card costs?*

 

http://en.wikipedia.org/wiki/Tax_incidence

 

*At least in my opinion the added price of the credit card transaction is like a tax on goods, except levied by the credit card company. I argue this is the case since the vast majority of places do not have a difference in pricing by form of payment.

[kenberg]

We just signed a contract to have a new porch built onto our house. The company allows for $5,000 to be paid by cc, the rest they want by check. I signed and congratulated them on this policy. They could accept credit cards and raise prices to cover the cost of it. Doing that, I would give them more money by cc, they would give some of it to the cc company, and then the cc company would give a portion of that back to me, keeping part as their share. I prefer to cut them out of the deal, they do nothing useful. Writing a check directly to the company is just as easy as signing for a credit card transaction.

 

There are a lot of folks out there wanting to grab a piece of every transaction. I am delighted to see them cut out of this one.

[barmar]

Yes, the vendors pay for the cost of the credit card transaction. I think that in many cases they pay this fee willingly. By accepting plastic, they make their business more attractive to customers, so they make more sales. Hopefully, the increased revenue makes up for the increased cost of doing business.

 

It's like the free WiFi that many businesses offer. It gets people into the business, and they spend money there.

 

It's very similar to the "loss leader" philosophy: by losing money in one part of the business you can make money in another part.

[kenberg]

There are of course reasons businesses do what they do. Fifty years ago, grocery stores and others gave S&H Green Stamps. Store X did it so store Y figured they had to do it also. You collected the damn things, pasted them in a book, and when you got enough you went off to the S&H store and traded them in for a toaster or something. Customers collected green stamps, S&H collected money without having to actually do anything useful. No one regrets the passing of this enterprise.

 

Plastic has its uses, that's true. But only sometimes. In the case of my new porch, it's a fair bet that a person who cannot pay cash should not be buying one. It will be nice, but not worth going into debt over. So it's write a check now or use plastic now and write a check at the end of the month. Actually it's spread over several checks as the job goes through stages but you get the idea. The sole purpose of using plastic would be to get the rebate at the end of the year, convenience doesn't enter into it. At some point it makes sense to cut out the cc companies from this transaction, otherwise I guess people could buy a house and put it on Visa. One hell of a rebate at year's end. That cash has to come frmo somewhere.