credit cards..which one's? (debts, interest, money, house)

[chet everett]

Nobody said it is "free" -- the various credit cards that CHARGE INTEREST are obviously costing the borrower money.

Even the cards that allow one to delay payments without interest on monthly payments cost someone something -- generally the transaction fees are paid by the merchant who feels the service is worth it and/or knows that the consumer will spend more for the convenience.

Oh and just for the record I was born WAY WAY more than 30 years ago...

[sterlinggirl]

Originally Posted by chet everett

Do you pay cash for your car too?

What about a house?

I fail to see why there is something especially noble about saving up for things that one can budget for and make payments on an appropriate time-line...

Yes, and yes.

There's nothing noble about being debt free, but it does beat the **** out of being a debt slave. Go ahead and trade your freedom away for that new car you so richly deserve if that's what floats your boat.

I'm pretty happy with my 15 year old car...especially when I'm enjoying a nice cup of coffee while I watch the worker bees leave for their crappy jobs in their new cars every morning. I'll get my work done, but it's on my schedule and at my convenience.

When you fuel a lifestyle on debt rather than savings, you become dependent on other people instead of keeping them dependent on you. As this happens, you slowly lose the freedom to dictate how and where you will live your life.

[lumbollo]

Originally Posted by Tightwad

I morn for the days of common sense and financial responsibility of the recent past after reading these two post.

It seems that the banks ,and other money lenders, have brainwashed those born in the last 30 yrs into believing there is such a thing as 'free' money thus erasing all the lessons they should have learned from their parents and grandparents about money.

Easy Credit is not the way to avoid debt bondage.

One of the best posts that I have seen on this site. Younger people believe credit cards are as necessary as air and water these days. Bottom line is to avoid as much debt as possible, pay off your debt on time and early if possible and let the rest take care of itself. You don't need to worry about your credit score if you do this.

It's amusing, in a dark sort of way, the number of people who still believe that our economy can continue to exist on revolving credit being used to buy consumer goods. Over the last 30 years the US economy has gone from one based on production to one based on consumption and that in part was related to the huge amount of brainwashing that has taken place in the media to consume via credit and that your credit score is more important than your health stats.

[dazzleman]

Might it be possible to borrow the money to buy these durable goods at a fixed rate, with fixed payments that will lead to the loan being paid off in a certain period of time?

I think that would be better than open-ended consumer debt that is not at a fixed rate, and has no real required repayment schedule. Owing money on open-ended credit cards can be a dangerous way to borrow money, and most people just don't think of it as borrowing, unfortunately. If you really thought about it, would you want to borrow under terms where the bank says "I can change your interest rate to whatever I want, whenever I want?"

[dazzleman]

Originally Posted by chet everett

Do you pay cash for your car too?

What about a house?

I fail to see why there is something especially noble about saving up for things that one can budget for and make payments on an appropriate time-line...

I think credit has its place and I have used it for major purchases in the past. The American consumer, though, has seriously abused credit by borrowing too much and rolling it over at high interest rates rather than paying it back over some period of time. It has become a pyramid scheme of sorts, with businesses relying on the abuse of credit so people buy things they can't really afford, and banks making short-term profits from problem consumers while pushing the risk off onto other people as much as possible.

People should use credit where and when appropriate, but do it with care, and make sure to have a payment plan that actually pays the principal off, not just the interest every month.

[sonarrat]

Originally Posted by chet everett

The consumer lending business ADDS to the US economy while affording consumers a higher quality of life. To assume that everyone is incapable of using credit wisely is to deny the very existence of the reason for revolving credit. Economists widely accept the fact that a healthy economy NEEDS credit to function.

GOT IT?

It pushes forward sales of items, but ultimately deteriorates the buying power of each and every entity that uses it and gives it to the banks.

[sterlinggirl]

Originally Posted by sonarrat

It pushes forward sales of items, but ultimately deteriorates the buying power of each and every entity that uses it and gives it to the banks.

That's a great point. All those interest payments subtract from the consumer economy rather than adding to it.

Although credit is a great short term way to stimulate growth, you have to subtract the long term purchasing power of those borrowers to balance the equation.

[chet everett]

Folks you are massively mistaken if you can't understand that more people spend more with credit than without it.

I don't care if you are considering an individual transaction, a particular merchant or a whole country. Expanded credit allows for greater prosperity. This has been true for a thousand years or more when certain religions / cultures made charging interest impossible and other did not. This is basic stuff. Really.

[Gandalara]

Originally Posted by dazzleman

I think credit has its place and I have used it for major purchases in the past. The American consumer, though, has seriously abused credit by borrowing too much and rolling it over at high interest rates rather than paying it back over some period of time. It has become a pyramid scheme of sorts, with businesses relying on the abuse of credit so people buy things they can't really afford, and banks making short-term profits from problem consumers while pushing the risk off onto other people as much as possible.

People should use credit where and when appropriate, but do it with care, and make sure to have a payment plan that actually pays the principal off, not just the interest every month.

Major point - look at the stores (on and off line) already clamoring for our attention with pre-pre-pre-Black Friday/Christmas sale prices.

Hey corporate - if I don't need it, I ain't buying. No matter how cheap!

To the OP - for a major credit card, decide what 'perk' you want ... whether it be cash back, travel points, hotel points, whatever is important to you. Then just make sure to pay your bill completely in full every month. Treat your credit card like you do your debit card - if you don't have the cash in the bank to pay the bill, you don't charge it.
If you must buy on installment for a major item - use the store's credit plan (ie, if you want furniture from Sears, get a Sears card) and pay more than the installment plan. Pay if off as fast as humanly possible.

[dazzleman]

Originally Posted by chet everett

Folks you are massively mistaken if you can't understand that more people spend more with credit than without it.

I don't care if you are considering an individual transaction, a particular merchant or a whole country. Expanded credit allows for greater prosperity. This has been true for a thousand years or more when certain religions / cultures made charging interest impossible and other did not. This is basic stuff. Really.

Beyond a certain point, spending more is detrimental.