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  1. #31
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    Quote Originally Posted by Ivy View Post
    Yeah, this is all true for me too. I don't use a CC because I don't have the means and discipline to keep it paid off. (Well- I have the means now, but I'm not sure I always will have it, and I am pretty sure I don't yet have the discipline.) We use a debit card for pretty much everything, although it makes me really nervous because if it gets sniped then that's our bank account, and that's all we've got. But I don't think a blanket statement that it's "not a good idea" is true either because it's actually a really good idea, if you can do it right.
    I had a my debit card jacked when I was in Cancun while on spring break in college.

    The first thing I did was pull my cell out of my pocket, call Wells Fargo, and get the card canceled and ordered a new card. Problem solved.

  2. #32
    Lay the coin on my tongue SilkRoad's Avatar
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    Quote Originally Posted by DiscoBiscuit View Post
    Might have already been stated, but using a CC as your main payment method for things isn't smart.

    Use a CC for emergency stuff.

    Get a debit card for everyday purchases.

    Pay off your CC debt first. Then get a debit card. Then take your credit card out of your wallet.

    Spend less, set up a Roth IRA. If you don't plan long term with your finances, you won't ever have any real savings and just stay on the credit treadmill.
    I think there are different lines of thought about this? I live in the UK and I think it's considered safer to use a credit than a debit card. Ie. if something gets hacked you're more protected if you've used a CC. I also know that for things like plane tickets, if the company goes bust, you get more protection if you used a credit card.

    I have a debit card but I mainly use it for drawing cash from bank machines. Occasionally I pay for things with it, especially if I can avoid incurring transaction charges that way, but more often it would be the CC or cash.


    EDIT: Oh I just noticed @Ivy said a lot of what I was going for.
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  3. #33
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    Quote Originally Posted by DiscoBiscuit View Post
    Well... as with everything what works for me won't necessarily work for everyone.

    I figured given the nature of the OP, that the kind of discipline you mention wasn't present.

    There are situations where where having and using a CC is beneficial, but for many, the option to spend more than one has with a CC can be too tempting an option.

    I mention going with a debit card, because it forces you to get your spending in order right quick. Once you have trained your fiscal discipline with the debit card, I would then recommend using a CC where it makes financial sense.
    Nah, I probably gave the impression I'm horrible with money. I could be better but I'm not horrible. I almost never pay interest charges on my credit card and almost always pay it in full (and if I haven't paid in full it's been a small amount for a month or two. I think in almost 15 years of having a credit card I've done that about five times.)

    My main problem at the moment is I'm not saving much, at least not in the country where I currently live - my investments are in my home country. My expenses are a bit less than my monthly income, but close. (In my defense, I work in the arts and live in a really expensive city!!)

    I'm more just curious about how people come at this generally. I know a lot of people who've had major credit card debt for years...
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  4. #34
    Strongly Ambivalent Ivy's Avatar
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    Quote Originally Posted by Giggly View Post
    @Ivy They say you should always keep a 15-30% balance on you cards to get the highest rating not pay them off in full (I keep mine at 15%). I got this info directly from experian. Of course that means the banks always will make that interest which sucks.

    Edit: the reason is because creditors only report once a month (sometimes less) and they could report at the time of the month when you haven't paid your bill yet or when you have 0 balance always.
    Ugh, I hate credit, it's like this maze that you have to be a certain height to navigate and I never seem to grow that high. I do my best. Thanks for the info Giggly.

  5. #35
    Strongly Ambivalent Ivy's Avatar
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    Quote Originally Posted by DiscoBiscuit View Post
    I had a my debit card jacked when I was in Cancun while on spring break in college.

    The first thing I did was pull my cell out of my pocket, call Wells Fargo, and get the card canceled and ordered a new card. Problem solved.
    Good for you. But you don't always know right away. They can jack it electronically these days, and your account is drained before you even know it's happening. If that's going to happen it's much better for it to happen to a CC where the charges will just disappear once you report the fraud, and it won't affect your cash flow at all.

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    Quote Originally Posted by SilkRoad View Post
    I think there are different lines of thought about this? I live in the UK and I think it's considered safer to use a credit than a debit card. Ie. if something gets hacked you're more protected if you've used a CC. I also know that for things like plane tickets, if the company goes bust, you get more protection if you used a credit card.

    I have a debit card but I mainly use it for drawing cash from bank machines. Occasionally I pay for things with it, especially if I can avoid incurring transaction charges that way, but more often it would be the CC or cash.


    EDIT: Oh I just noticed @Ivy said a lot of what I was going for.
    I understand the security issues, but the problem with CC's is that they set a soft upper bound on spending that isn't reflective of the amount of money you actually have.

    If you primarily use a debit card, you can only spend as much as you have, and this forces financial responsibility on the card holder (at least to an extent).

    Whereas with a CC you can spend all the way up to your limit which is usually not reflective of how much $$ you have. With CC's you learn to spend as much as you can afford in monthly payments.

    The problem with this is that it's exactly what the CC companies want and how people never end up paying down their CC debt. The little bit more a month you can spend a month and get away with, with CC's is offset by the fact that more and more of your $$ are going to start going to interest payments etc. and you can end up never freeing yourself to actually start saving money.

  7. #37
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    Quote Originally Posted by Ivy View Post
    Good for you. But you don't always know right away. They can jack it electronically these days, and your account is drained before you even know it's happening. If that's going to happen it's much better for it to happen to a CC where the charges will just disappear once you report the fraud, and it won't affect your cash flow at all.
    I've also been hacked, and Wells called me up first thing and asked if the charges were correct and I said hell no.

    This depends on the bank, but if your bank has a good fraud department, there isn't too much to worry about.

    But depending on your bank ymmv.

  8. #38
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    Quote Originally Posted by DiscoBiscuit View Post
    I understand the security issues, but the problem with CC's is that they set a soft upper bound on spending that isn't reflective of the amount of money you actually have.

    If you primarily use a debit card, you can only spend as much as you have, and this forces financial responsibility on the card holder (at least to an extent).

    Whereas with a CC you can spend all the way up to your limit which is usually not reflective of how much $$ you have. With CC's you learn to spend as much as you can afford in monthly payments.

    The problem with this is that it's exactly what the CC companies want and how people never end up paying down their CC debt. The little bit more a month you can spend a month and get away with, with CC's is offset by the fact that more and more of your $$ are going to start going to interest payments etc. and you can end up never freeing yourself to actually start saving money.

    Depends how you use the CC. For a lot of people, the above is definitely the case, but like I said, I've always spent based on how much money I actually have, and have almost always paid off in full. I think the worst amount of monthly interest I have ever paid was something like £30 (for a month or two.)
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  9. #39
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    Quote Originally Posted by SilkRoad View Post
    Depends how you use the CC. For a lot of people, the above is definitely the case, but like I said, I've always spent based on how much money I actually have, and have almost always paid off in full. I think the worst amount of monthly interest I have ever paid was something like £30 (for a month or two.)
    If you're spending only as much as you can afford and still save, then why is your choice between paying your CC bills and saving money?

    Smart finances assume a certain percentage of income will go to savings automatically.

  10. #40
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    Quote Originally Posted by DiscoBiscuit View Post
    If you're spending only as much as you can afford and still save, then why is your choice between paying your CC bills and saving money?

    Smart finances assume a certain percentage of income will go to savings automatically.
    I'm spending only as much as I can afford...the amount of savings currently is pretty minute.

    So yeah, my finances could be smarter; I'm just saying that not everyone who uses a CC is spending way above their means and racking up huge interest charges, or interest charges at all. Try working in the arts in London; a lot of us are the same boat
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