Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I've watched for long time as friends/family get themselves deep, deep in debt due to mis-management of their CC due to lazy and/or misconceptions in their attitudes towards money.
What none seem to get ,or understand, is that a Credit Card is nothing more than an open ended line of credit that is a LOAN!
Imagine , if you will, that every time you needed to use (read borrow on) a CC that you had to fill out a loan application. Would that slow a lot of people down since they know that they wouldn't qualify for that loan. Sure, we all have been brainwashed into believing that somehow that loan was 'free' money since that is no pain (up front) to "spending" free money.
So my question to all is how do you view your Credit Card spending?
Do you view this debt as free money?
Do you view this money as a loan?
Do you even have a clear understanding of what a Credit Card really represents?
The credit card is a convenience. I pay it off every month so I never pay any fees or interest. The rewards are nothing special but I like being able to avoid carrying a lot of cash
The credit card is a convenience. I pay it off every month so I never pay any fees or interest. The rewards are nothing special but I like being able to avoid carrying a lot of cash
All well and good but the topic it how to you view a CC? As free money or?
I've never paid a dime of interest on a credit card. Paid it off in full EVERY month.
At the moment we have a card with a 0% APR that we're running ~$2,500 balance on. The reason we haven't paid it off yet is that the 0% lasts until October 2010, and instead of paying it we have that $2,500 in a high-yield savings collecting interest before we use it to pay off the balance before October comes.
Also, even though I've never paid interest nor have I paid a fee--I've gotten over $1,000 probably in cash back incentives over the years.
Credit cards are fantastic if you know how to work them.
Do you view this money as a loan? No, because we pay off our credit cards monthly via autodebit.
Do you even have a clear understanding of what a Credit Card really represents? Yes.
So my question to all is how do you view your Credit Card spending?
My credit card is a tool that I use to manage my money. (I'm using the "royal" singular. Hubby does the same as me. We're lucky that way.)
I can swipe at the grocery store and get everything on my list, and I'm out the door. I can buy supplies that my properties need and bill out the supplies to the clients on a monthly basis so their stuff gets handled and they are happy and I get my money and I'm happy.
Clerks are so used to cards that many of them can't figure change.... the register has to handle it. If you let a clerk finish the transaction and then throw a monkey wrench into the mix like, give them 3 pennies so you get some bills and a quarter back, that can take you a half hour while the clerk tries to figure it out. I don't want to spend that kind of time.
I do understand that a lot of people easily overspend on credit cards. I see them on Oprah and Dr Phil and on Suze.... time and time and time again. Tons of shows all over the cable stations on this very subject, and I sit and watch like so many frugal people and tsk tsk with the best of them.... but I have to tell you -- very very few people whom I know personally well enough to get a gauge on their spending habits are doing this. Most everyone I know has kids that have activities they need to budget for and other things going on their lives, and they stick to their lists and buy what they need. Oh an occasional splurge.... but a Starbucks coffee and muffin every six months isn't going to break any of their banks.
In fact, I only know of one person in my clique that shops for fun. And even she's getting tired of it, because what's the point when she wears something new and we don't care about it.
AND -- I also get money back on purchases. It's a nice chunk, and I'm okay with it -- I know, since we charge lots of stuff (around 3K a month) they are making a small bit of change off us...
I have a lot of friends who use credit cards very unwisely. They buy the TV, the holiday gifts and go out to dinner with the mindset that in order to do all these things to satisfy themselves it only costs $35 a month or whatever their minimum payment is. There is no such thing as "saving up" for something anymore.
Many don't have a long view of the future ramifications of racking up such debt and don't give a fig that they will end up paying multiple times over once the interest and card charges are actually paid off. They just want the stuff now and don't think past that as long as they can make their monthly payment. God help them if they lose their job.
I have relatives that just "can't bear" not getting their kids very expensive gifts for Christmas and birthdays. The idea of telling their kids that "I'm sorry. I'd like to get you an Xbox 360 and a few games but it's just not possible right now" draws looks of sheer disbelief. I think most of that disbelief stems from the fact that they want their kids to be able to tell their friends "I got an Xbox" not "I got clothing and an iPod shuffle."
I think a lot of people know that it's not "free" money but they feel that they work hard and how dare they be deprived of having a nice television set. So they use credit and figure they'll worry about any fallout later.
I think it's because people suck at math. They don't look at the interest rate and don't calculate how much they are paying for items after they finally (if ever) pay off the balance. One of my friends who is really smart and in law school, couldn't figure out why it was taking so long to pay off a 2000 dollar credit card bill when she was paying the minimum balance every month. And she didn't realize she was paying like triple/quadruple more for an some items she bought. :O
All well and good but the topic it how to you view a CC? As free money or?
If he/she pays it off every month with his/her own hard-earned cash, then is it not logical to deduce that he/she probably does not view it as "free money"?
I do the same, by the way: charge it, get the points, pay it off in full every month.
Last edited by ambient; 02-27-2010 at 05:54 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
