C.C. opinions

[buster7823]

Okay okay okay so I probably know what the majority is going to say and I know what the experts say (D.R.) but is there really anything wrong with using credit cards and paying them off every month. Now I know what your going to say, "there will probably come a time that you don't pay it off at the end of the month." That has not been the case for my wife and I for the last 4 years. We put mostly everything on a C.C i.e. groceries, gas, dining out (when we eat out), home improvement and so on and then when the statement comes in we pay it off in full, no questions asked. We have paid for airline miles and a few other things with the points we get by doing this. I know some say that you tend to spend more when using plastic as opposed to cash but I can honestly say that we stick to our written budget so that rarely happens in ever. So go ahead, I know I am going to get roasted for this so lets hear it.

[Caoineag]

I don't know why you think you are going to get roasted. The majority here do as you do. Look at the Cash or ATM thread. Almost everyone there uses credit. I am actually the outlier who uses cash but I do that because its simpler in my household. If credit works for you, then no reason to change.

[Joan.of.the.Arch]

I think you are handling it the smart way.

[disneysteve]

I totally agree with you and disagree with Dave Ramsey on this issue (among others).

There is ABSOLUTELY nothing wrong with using a credit card and paying the balance in full every month. Some caveats:

1. Always pay on time.
2. Always pay 100% of the balance due.
3. Never charge more than 25-30% of your credit limit.
4. Don't buy things you don't need or can't afford just because you have a credit card.
5. Use a rewards card that earns you rewards that are useful and meaningful to you.
6. Don't pay an annual fee unless doing so gets you something that is worth at least as much as that fee.

We charged about $40,000 to our credit cards last year and earned about $900 in rewards. Nothing wrong with that at all.

[MonkeyMama]

We earn far more in cc rewards than interest on our cash, these days.

Also, credit cards offer better fraud protection than debit cards, etc. I just feel it is safer and easier all around. As others have said before, when I spend cash it's hard to keep track of. I know where every penny goes since I rarely use cash.

[buster7823]

Sorry I just thought I would be in the minority here but I am glad to see that I am not. I believe as most of you do, its simple be responsible. I like and agree with alot of what D.R. has to say but I disagree with him on this one particular issue. The one thing I have never understood about him is him saying who cares about your credit score because you aren't going to need it. Well most people are not in his situation, we don't have the cash to go buy everything with cash, we need our credit scores to be good.

[disneysteve]

DR also seems to ignore that credit scores are not just used for granting loans. They are also looked at by potential employers, landlords, insurance companies, etc. It is in everyone's best interest to have a good credit score.

[buster7823]

Good point Steve! I just think having a good credit score makes life a little easier.

[Broken Arrow]

Buster, my man. Not everyone is a DR zealot.

I mean, don't get me wrong. He deserves credit where credit is due. *drum roll*

But his aversion to credit and credit card is one of the biggest knocks against him.

[buster7823]

I catch his show every now and then when I can (mainly because I like talk radio and personal finance issues) and he does have some very valid points. I could just never grasp why he gives the advice he does on credit and credit cards. Glad I found this forum though.

[Broken Arrow]

Whatever happened to the good ole days when the forums used to get trolled by DR zealots? It was almost fun reading the nearly-blind diatribe on how credit is evil and how we are all so wrong?

[boosami]

There are definitely people here who are completely anti-credit-card and they pop up every once and a while on threads like these to say CC are the devil. They are definitely not the majority here, thankfully

I'm like DS, I run a ton of money through my CC's each year. I charge about $100k through my personal cards a year, have never paid a dime in interest, and reap the rewards. That's enough points per year to get a "free" 42" plasma TV. Take that, cash users. I am a point hoarder though so I'm pretty much saving up for $10M points to lease a Lamborghini for a year! Yes, that's in the catalog.

[LivingAlmostLarge]

Well the real reason DR needs to say what he says? Have you looked at his followers?

They are a MESS. Total and complete financial mess. They can even overspend using cash.

When you lack self-control, you need to take the simplest path. That path typically is cash. When it runs out you can't buy more.

I am sorry but it's insane to pay cash for GAS for a CAR! I mean how do you overspend on gas? You put it in, you go where you need to go, and THEN you refill! OMG!

But these people do. They cannot even use a prepaid gas card or debit! Why? Because they have no self-control. They can barely go into a gas station and not buy a soda or candy bar.

This has NEVER happened to me. Why? I don't bother going in. I charge it. But more than that, it's GAS. My gosh, who needs to stop for gas and treats daily?

Is it so hard to pack your own? And even paying the most expensive price of individual packages, which I do! for convenience, it's still cheaper than going in.

But they need cash. They can only fill up $40/week on gas and that way they know they can drive X, Y, and Z, and no extras.

That sort of craziness is really needed to help people who have no control over their spending. It makes a lot of sense.

But in general, if you live on a budget, it shouldn't matter how you pay.

I make around $2k/year in cash rewards. I charge my DH's tuition for the past 3 years. That's $75k on the credit card. Um, if it's not paid he's not going to school...So why not get the rewards?

Yeah why would I pay cash for something absolutely necessary? Stupid. I'd be someone would say I'm overspending, yeah right.

[EEinNJ]

Dave who?
I took Schwab up their kind offer of a visa with 2% rebate, now I put everything I can on the card, even my electric bill, and pay it off every month. After all, you're lucky if you can get 1% on cash!

[disneysteve]

I am sorry but it's insane to pay cash for GAS for a CAR! I mean how do you overspend on gas? You put it in, you go where you need to go, and THEN you refill!

But they need cash. They can only fill up $40/week on gas and that way they know they can drive X, Y, and Z, and no extras.

Yeah why would I pay cash for something absolutely necessary?

I agree, but you answered your own question. The people who only have $40 cash for gas know that if that gas runs out before the week runs out, that's it. The same people who use a CC know that if they use up the gas, they can just go get more and charge it. I can't comprehend that mindset but lots of people live that way.

I also agree with using a rewards card to pay bills that you'd be paying anyway. I charge my auto insurance. I charge my phone bill, my cable bill, auto repairs, medical copays, internet service and more. They are all bills that would be exactly the same amount no matter how I chose to pay them. Why not use a credit card and reap the rewards?