Does anyone else eschew credit?

Just to be fair to mysterman; his method will ensure that he never goes into debt. Using credit cards, for many (not all), helps people get into debt.

A lot of people us a CC with the intention of paying it off every month, obviously that doesn't always happen.

If everyone just used cash all the time, there would be FAR less debt in this country.

That being said, I'm sure MM knows he's missing out on some benefits and savings by not using a CC; but if it works for him....

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@caribou,

caribou wrote:

...Credit cards are only as bad as the people who use them....

You should know better than that. Example:

http://www.consumerreports.org/cro/aboutus/mission/viewpoint/costly-credit-card-practices-5-07/overview/0507_viewpoint_ov_1.htm

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@Brandon9000,

We use credit cards when we have to but prefer the old fashioned method of either waiting until we can afford an item or pay cash. We are not in debt for anything and that includes two homes, two cars (not new but who cares) a boat, a camper and another piece of real estate for investment purposes. We have worked hard to get where we are - debt free - because we knew that the boomers were going to have a tough time. We are retired, in our 50's.

People lived pretty well in the days before credit cards. Nowadays most people want instant gratification and don't want to wait for a big ticket item. It's a bad habit for anyone to get into in my opinion. I've seen people buying groceries with their credit cards and wonder if they know they're paying sometimes 17% interest - or more. Unless you pay the thing off each month, forget it.

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@Brandon9000,

It is true that some credit card companies do engage in questionable practices. For instance some shorten the grace period without notice or in print so fine nobody will notice it so they'll be able to catch some folks not getting the bill paid before the interest is due. Finance charges and interest and the rules governing them vary from card to card too and the credit card company can arbitrarily change the rules to catch you if you aren't wary.

Our rule of thumb is to pay the bill within 24 or 48 hours of its arrival. We pay on line to ensure that there won't be any delay in the mail.

I do like using the credit card for the extra insurance it provides on a rental car or purchased items, however. Also most provide some accident insurance for public transportation. It is a way to avoid carrying large amounts of cash for hotels, etc.

We haven't always had the discipline to use a credit card like cash instead of in lieu of cash though and ran up some significant bills of what we now call 'dumb debt' before we got smart. I shudder when I remember those days.

Neither of us is ever tempted to overspend any more though. That's like any other habit that can be developed.

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Credit is important to keep up, but watch out for the scam artists promising to wipe all negative info off. Credit Counselors can be a good option to negotiate on your behalf, but ask first if they are non-profit. A Google search that way, would pull up legit ones

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@bathsheba,

bathsheba wrote:

We use credit cards when we have to but prefer the old fashioned method of either waiting until we can afford an item or pay cash. We are not in debt for anything and that includes two homes, two cars (not new but who cares) a boat, a camper and another piece of real estate for investment purposes. We have worked hard to get where we are - debt free - because we knew that the boomers were going to have a tough time. We are retired, in our 50's.

People lived pretty well in the days before credit cards. Nowadays most people want instant gratification and don't want to wait for a big ticket item. It's a bad habit for anyone to get into in my opinion. I've seen people buying groceries with their credit cards and wonder if they know they're paying sometimes 17% interest - or more. Unless you pay the thing off each month, forget it.

I couldn't agree more. I don't try to con con men.

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Times are a' changing, folks.

http://www.nytimes.com/2009/05/20/us/politics/20web-credit.html?partner=rss&emc=rss

The new rules will likely mean less perks for those who like to exploit credit card companies, and hopefully less deceptive practices on the part of the companies themselves.

Cycloptichorn

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@Cycloptichorn,

Quote:

The new rules will likely mean...

banks, many of which are in deep doo doo will have to start making more profit from the cardholders who never pay late...perhaps with yearly fees.

I crashed on credit about 8 years ago...my own fault...but I'll never have a card again...some people can't handle credit

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@panzade,

Seems to me the only ones who are benefitting from this deal are those who don't manage their credit well though. Sad

It looks likely that those of us who use credit cards responsibly as a matter of convenience and who pay off our balance immediately when the bill comes in will get hit with fees to hold the card, something we don't have now, and higher prices at the cash register because the card companies will have to recoup their losses somehow.

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Money changers....et al.....piss on all of em.

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@Cycloptichorn,

Do you think this is good or bad for the majority of Americans?

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@maporsche,

Seems to me that all that is needed is a) laws against usurious rates and b) truth in lending. I think had they made it mandatory that credit card bills should show in prominent large type the interest rate, the minimum payment due, the due date, the penalty charge for late payment, and also any changes that will occur in 30 days, that would have sufficed for credit card reform.

Like Panzade, something over 30 years ago we hit our wall where credit was concerned and we were in way over our heads. That wasn't the credit card company's fault or other lenders' fault. That wasn't anybody's fault but ours. We knew better and did it anyway. It's so easy to think another $10/month won't matter or that we can pay the minimum for now and later we'll have the money to pay more. It was painful, but we dug our way out and have never again committed those credit 'sins' again, but we had to experience the consequences before we developed the necessary discipline to manage our finances wisely and use credit wisely.

Once or twice over the last 30 years a payment got lost in the mail. Each time the credit card reviewed our payment record, believed us, and removed the late fee. (We now pay the bills on line and there's no danger of that happening at all.) When a credit card company gets greedy and implements policy we don't like, we simply use another. Eventually we arrive at the very best company to do business with and it is a pleasant experience.

I wish the government hadn't meddled in a way that will likely have the effect of a less pleasant experience for us. As our local paper said this morning, those of us who have been the most responsible and pay off our cards every 30 days 'are going to have to start paying our share of the load'. That won't do anything to encourage people to be aware and more responsible in how they use credit.

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@maporsche,

maporsche wrote:

Do you think this is good or bad for the majority of Americans?

Good, naturally. Addiction to credit, even if you manage it well and profit off of it, is a pox upon our society and does not create greater wealth for anyone except the credit card companies.

A large group of our society has gotten used to the idea that credit cards are free, or even worse, pay them to use them. They are not free. What we will see now is a return to sanity, where people are faced with the costs of the convenience they enjoy instead of seeing those costs subsidized by the poor and the foolish.

One of our largest financial problems is an over-reliance on credit, and the pervasive attitude that it's okay to put everything on the credit card and pay it later; anything which helps reverse this foolish attitude is a great thing in my book.

I would also mention that the fees charged by CC companies to small businesses, in terms of the machines themselves and the transaction fees, go directly into their prices or come from their profits; so ending this reliance on credit cannot help but benefit many of these companies as well.

Cycloptichorn

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From today's ABC news site, to paraphrase:

In Miami, FL, the average credit card debt in each home is $9,797.38. That means to pay off outstanding credit card bills, debtors would have to forgo 22.61% of their incomes. Other areas where Americans continue to spend far more than they earn include Tampa, Fla., where the average household owes 17.1% of its total income; Los Angeles, where it's 16.81%; Jacksonville, Fla., which owes 16.38% on average; and Orlando, Fla., indebted by 16.37%

( from http://abcnews.go.com/Business/story?id=7727426&page=1 )

This goes way beyond bad decisions by a small number of unusually foolish people. Clearly, there is something dreadfully wrong. A law was just passed which imposes some mild regulation on the credit card industry, and which they screamed bloody murder opposing. Hopefully, it will help a little.

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@Brandon9000,

one of the factors that caused Floridians to get into so much debt was the over valuing of property and the ease with which they could re finance and secure second mortgages...when a home was re financed, the credit cards were paid off and the whole process started again
I think Florida has more upside down mortgages than any state, except perhaps, California

1 Reply

@panzade,

panzade wrote:

one of the factors that caused Floridians to get into so much debt was the over valuing of property and the ease with which they could re finance and secure second mortgages...when a home was re financed, the credit cards were paid off and the whole process started again
I think Florida has more upside down mortgages than any state, except perhaps, California

By some estimates, the average American household has over $9,300 in credit card debt.

from: http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/TheBigLieAboutCreditCardDebt.aspx

It's not just Florida.

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@Brandon9000,

I suspect a lot of that debt is for repair and clean up after the numerous storms that routinely hit that region. Insurance doesn't cover all the expense.

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@Brandon9000,

Brandon9000 wrote:

panzade wrote:

one of the factors that caused Floridians to get into so much debt was the over valuing of property and the ease with which they could re finance and secure second mortgages...when a home was re financed, the credit cards were paid off and the whole process started again
I think Florida has more upside down mortgages than any state, except perhaps, California

By some estimates, the average American household has over $9,300 in credit card debt.

from: http://articles.moneycentral.msn.com/Banking/CreditCardSmarts/TheBigLieAboutCreditCardDebt.aspx

It's not just Florida.

Nope. Americans have been abusing credit, badly, for a long time now. This is one of the major reasons I tend to discount the 'it works for me' stories that I hear about credit; it quite obviously does not work for most, and the industry is really parasitical in nature and should be heavily reformed.

Cycloptichorn

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@Cycloptichorn,

ok cyclo....but I'm curious....who do you think's at fault for the CC companies running amuck....the sucker consumer, the greedy credit banks, or the US govt for not overseeing the whole mess....or all three?

1 Reply

@panzade,

panzade wrote:

ok cyclo....but I'm curious....who do you think's at fault for the CC companies running amuck....the sucker consumer, the greedy credit banks, or the US govt for not overseeing the whole mess....or all three?

All three. Every group involved should have known better and all of them were blinded by greed and convenience.

Cycloptichorn

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Does anyone else eschew credit?

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