Another potential way for the government to control you and businesses to completely monitor you.
shareIt makes me really ponder because once you buy everything on credit card, you have to pay it back with interest. I am learning that the hard way now. I thought I could pay everything back and people using cash were old school. Now I understand why people pay in cash!
shareYou don't have to pay interest unless you carry a balance. If you pay the full balance every month, there is no interest. I use my Amazon card for everything, but I only ever buy things I can afford to buy for cash. I use the card for convenience and for rewards. I have never paid a penny of interest and I earn money back.
(sorry I know amazon is a dirty word here)
I have minimum payments of $60, $61, $29 (still on promotional period), and $25. Would you like to know the balances of the first two of why those minimums are so high?
shareI do not mean just pay the minimum. I mean pay the whole amount, every month. Pay it during the grace period.
Interest never starts to accrue.
How do I pay $3000 in one month? I make $630 every two weeks with my part time. There is no way I will pay that off in a year. Then I have my monthly payments and so that tacks on. :'( I may be able to pay it off if I work diligently. I do not have cable and just the necessities.
I am saying pay it the first month that you bought the things. Not talking about accumulated debt, because I never let it accumulate. The point is to never let it start charging interest in the first place. I'm talking about how not to ever get into a hole, not how to get out of a hole.
If you bought 3000$ of stuff in one month when you did not have $3000, that is the problem right there.
It's more likely that is really only about $1000 worth of stuff, and you were carrying it for so long that it turned into 3000.
That is another way to look at buying on credit. Do you like that shiny thing enough to pay 3x the price tag for it?
Well the property tax was $3000. I estimate I paid at least $300 in interest over these last 12 months. The other 12 months were 0% intro
shareCredit card vs. cash If you don't have the cash,you won't spend it.
shareIf you have a $3000 property tax, you would need a way to clear it before it is overdue or it goes to collections. It would seem to be better to pay it in monthly installments and put it on a credit card with 0% APR. Of course in my case, neither way would have been better; but then I did not buy the house, my parents did.
shareI talking about everyday spending. I guess I mean impulse buying.
shareYeah. But in the grand scheme of life, you can get yourself out of a pickle by saying that you truly meant to put a lump sum amount on a credit card vs. impulse spending. $3000 is $3000 and both the impulse spender and the "meaning to do well" are in the same boat.
shareI don't do online banking and I'll never have a debit card. Recent headlines locally are how 'skimmers ' are becoming ever more sophisticated.
shareGood call. Never buy a credit card neither. It was the biggest mistake I have ever made. If I ever pay down my debts, I promise I am only using it for emergencies.
shareWhat do you mean by buying a credit card ?
I adopted that mindset long ago, of only using my card in emergencies. However, nowadays, I use it monthly just to acquire points which translate into cash discounts on purchases. Each month, I pay my balance in full and never acquire any interest charges.
I have a completely free checking account that pays me interest on my monthly balance. I live debt free except for my monthly living expenses.
I have an excellent credit rating yet haven't exploited it.
And I'm not a college graduate but a hard working average joe who has experienced unemployment and its accompanying depression often while in pursuit of the American Dream.
Well, if you use it responsibly. I, however, did not. I screwed up big time. My debt to savings ratio is 8 to 1. My credit score is very good and may go in the toilet.
And what checking account gives you interest? The bank I am with does not give me anything.
Yes, you did ! And now you need to graduate from the School of Hard Knocks.
shareDave Ramsey tells wonders. I actually thought to myself, while watching one of his videos "why would you pay down the smallest balance first and work your way up? You would have so much interest." That was answered when I had a job loss and then figured "Well crap, if I had started with the smallest balance card, I would have succeeded in at least closing that out!" Oh, how life teaches you things. I have always believed in karma.
shareI'm beginning to wonder if you're for real. If you're referencing Dave Ramsey, you can't possibly be as naive as you're making yourself appear to be, unless you've just had a major financial epiphany. And if that's the case, then you're on the road to recovery.
shareIt had taken me a job loss to figure it out. I also just found out I was living paycheck to paycheck all this time. Shocker right? For the last 4 years!
I kind of blame the fact that I did a lot of freelance work, extra work, production assistant work, and part time gigs. It gave me a false sense of security. I never actually thought I needed consistent $. Once I found out I was off my mom's health insurance and I had to pick up the car insurance and then I saw all my bills laid out, I became afraid. When I lost my job and never thought it would ever happen, it kind of put the nail in the coffin. I had one month of wondering how $600 was going to cover $8000 in credit cards and $540 in bills for a month.
So, while you were in college, you were never aware of your fellow Americans surrounding you who were " living paycheck to paycheck ? "
shareI actually just figured out what that phrase meant. If you do not have a job, you do not have anything. Somehow I was able to put all my freelance work and part time work together and I had never lost anything, I just transitioned. Now I actually have a savings and glad I was able to get $1000 and growing. Now I have to pay down my debts.
How the hell do people live like this with a house and a family? OMG!!! And when you lose a full time job, you lose pretty much everything. My flex full time, that allowed me to transition money making hobbies also went with it. I had only two sporadic jobs, of which filled my resume to make myself look employed because I am still employed with them; however, I would not have made money until they actually had something. I am so thankful for the part time I now have.
What were you buying when you ran up the $8000 debt? Is it anything you can sell? I would start selling as much stuff as you can and then maybe look for a downsized house or apt.
I was helping my parents with property tax.
shareYou put their property tax on a high interest credit card? Yikes. They let you do that, and they know the situation you're in now because of it?
Can you consolidate the debts and put them all on a lower interest card?
Well, one of them is 14.4% and the other one will come off promotion in June. That will be 17%.
It was kind of the only way to pay it down. There is no way I could lump sum a payment for $3000
Are you saying you signed up for 2 new cards to pay off the old cards?
And the new cards have higher interest than the old ones?
is this for real?
No. I signed up for two cards to cover property taxes for two years. I was planning on paying them down. Each year was a $3000 property tax.
shareOk, so your parents were behind on their tax.
You lent them the money or gave it to them?
Do they know of your current situation? That you lost your job and cannot afford to pay off that money you gave/lent them?
What is their situation, would they ever be able to pay you back?
What will they do the next year when their property tax is due?
Well, they expected me to pick it up. I sort of cosigned on the house and so I picked it up. I am not sure how to break it to them now. My mom is not exactly a nice person when she gets mad and my dad probably would be fumed.
I am just hoping I can make enough to pay down this mess.
You might need to move in that house since you are paying for it anyway.
shareI all ready live here, but I have no idea how long it is going to take to pay this mess off. My credit score right now is Very Good. I am just praying that I make the minimum payments long enough to get a windfall a couple times to pay these off.
shareIf you live with your parents, how would they not know you lost your job?
Do they work at all? Can they help pay it back?
I do not. I live in a house I cosigned, in another state.
If I tell them, yeah. The problem is telling them that I put it on credit cards.
Either this is very confusing or you are giving partial information or conflicting information which makes it seem more confusing than it is.
Either way, best of luck to you but I am done trying to unravel the ball of string.
I can only hope *sigh* I figure I can let my utilities go and pay them 29 days late and get enough money to throw at these debts. I mean the interest on utilities is not much.
shareAre you seriously trying to bs me? A professing college graduate just now coming to grips with reality? I smell troll !
shareI graduated in 2012, but yeah, I kind of messed up on this one.
share"Kind of messed up on " what, basic survival in spite of a college degree ? It's kind of five years later, dude.
shareWell, it did not hurt as much when I had consistent income. All my prior opportunities had income coming in so I could pay my debts. It was not until the job loss that I lost that flexibility.
I mean why would you have a saving if you knew money was coming in right? Now if you suffered something where you know no income is coming and you see that you will not make it for a given amount of time, it tends to make you wonder. That wonder, for me, came as a shock.
arvin, I could care less if you are trolling or not. I'll answer just the same because maybe just maybe someone else reading this thread completely will have their eyes opened.
We were talking about this in another thread. My youngest daughter was quoted in one of Dave Ramsey's books. Divorced, raising children, works a full time job, goes to University full time, owes no debt, and owns everything she has outright. She's the smart one, and under 30.
On the other hand, my other youngest isn't completely there yet. Like you, he fell on hard times, lost his job of many years which while he had it led him to think the money he made would last forever, albeit, living pay check to pay check. He was out of work totally for a year and a half. Now mind you, my dil worked, but their income was cut to 1/4 of what it was and the bills started to pile up, as did the use of credit cards for the 'emergencies'. He's back at work, still focused on the debts, but little things are creeping back in such as paying for 'emergencies' with a credit card.
One child of mine FREE. Another child of mine ENSLAVED.
Having and using a credit card is too close for comfort. It's UNcomfortable to pay for anything with what one has in their pocket or their bank account at the moment one wants to, but it can be done. It's delaying that instant gratification, arvin, with the reminder of Just-How-Uncomfortable-Having-To-Pay-The-Debt-Off-Is.
Ya gotta wonder why they're pushing, pushing, pushing people to use credit cards, and to make their purchases, as well as to pay their bills on their phones. Enslavement.
Cash. If you don't have the cash, don't buy it. Cash only, and you'll be amazed at how quickly all the stress starts going away. I refuse to be indebted to anyone.
One can justify using a credit card every which way to hell, but one is still indebted..until the card is paid off completely.
The only problem is though is a payment that is like in the thousands. I would not have had enough money to pay down a property tax, but I still had to come up with it right? Because I do not have the cash, does not mean I cannot put it on a loan (credit card) and pay it later. I am sure there is a way to justify how many minimum payments one pays at the cost of how many bills would have had been delayed had I lump summed the cash that I actually do have.
shareHave you ever heard of the fable, The Ant and the Grasshopper ? That used to be required reading in grade school for a reason.
shareditto everything you said.
I use my card all the time and have never paid a penny of interest in my whole life. I only buy what I can afford, and I pay the full amount every month.
Using a credit card does not have to mean borrowing money. I just treat it as if it was cash so if something costs more than I have, I don't get it.
But if that is the case, you treat a credit card like cash, why even have one? Credit cards are usually used to where you have amounts greater than what you can afford. Even with interest, on top of the minimum payment; it is better to pay that one month than paying the entire balance. Of course, it would put you in the situation I am currently in. Then again, I do not have to pay that $3000 all at once. I now spread the pain over an entire year.
shareI have it for convenience and for rewards.
You cannot use cash to shop online.
You can't buy plane tickets and hotel rooms with cash.
I don't like to carry a lot of cash.
You earn points when you use the card, which you can use as money. So if I use the card on necessities I would have bought anyway, like groceries, I get cash back for 'fun' things like CDs or shoes.
You don't need literally a credit card to shop online -- that's what debit cards are for. They perform the same function -- a card with a number -- but it comes directly out of your bank balance and in that sense is "paying cash" because it's not credit, it's literally directly debited.
I ask the same question -- if you treat a credit card like cash meaning you only use it for an amount you know is already in your bank to pay it off with within the same month, why not just use a debit card?
Those points you earn can't be all that lucrative.
Well, one huge difference between credit and debit cards is when someone actually steals one of them. If they have your debit card, they could pretty much wipe your entire checking out. If someone has your credit card, chances are you can get that credit restored.
But point wise, it does not really help because you are still charging that credit card. I know one of my cards, I get cash back. The only problem is you would have to spend $400 worth of whatever the category is to get 2000 points, which would give you either $20 in cash or $20 in paying towards your credit card. Unless you sign up for it and receive thousands of points, I would not say it is worth it. If you knew 1000 points could get you something for free and you had to spend that money anyway, it would be advantageous to use a credit card.
I'm not sure but I think banks protect you if your debit card is stolen and you report it asap. Even if the person wipes out your checking account supposedly the bank will cover it -- isn't that standard? I'm sure I've read that in every Terms leaflet that ever came with my debit cards at renewal time. A decent bank will restore your balance since it was lost in a criminal act.
shareIt could be, but that is why they say it is safer with a credit card. It also depends on how long it would take to restore everything. From a credit card, they could restore it within a few days. For a debit card, I am sure there would be an investigation and it would take quite some time.
Or think of it this way. If you have a credit card and it gets run up, you still have cash in the bank. If you lose your debit card, and it is wiped; you would still have your credit card, BUT 1.) why would you want to run up your credit card with interest and 2.) why would you want to wait for your cash to get back to you? Everyone needs cash and if it is something I have learned with my job loss, it is a heck of a lot better to have cash on hand than credit. Cash is almost like your "soul" of living on earth. Without cash, you are pretty much homeless.
Cash is what pays those minimum payments, finance charges, and interest. With a credit card and nothing to back it up, you are screwed.
I'm not sure what the discussion has become here. I thought you were saying to the other guy "Why use a credit card if you can already afford to pay for whatever it is using your actual cash" (or a debit card if the purchase is online)
I was saying the same thing. I don't understand why, say, someone wants to buy something for lets say $50. He knows he has a lot more than $50 in his actual checking account and all his living expenses are covered. But he pays using a credit card then pays off the $50 almost immediately (or at least within the grace period) thus avoiding interest fees.
But what's the point? You put something on your credit card then go home and almost immediately use $50 of your bank balance to pay off your credit card purchase?
I don't see the point in people doing that. That's the main thing I was posting for. If you have the money to pay off the balance almost as soon as you even incurred it, why involve the credit card at all?
It seems stupid.
Yes, I was in agreement with that point. What I was adding was that in a scenario, where your bank account is wiped, it would be much better, in my opinion, to have a credit card on hand. I actually have both and I have had the fear of thinking I lost my debit card. Additionally, I have paid for something using a debit card and then I had to return that item. On a credit card, it is much faster to get a return than having it done on a debit card.
If you are using a credit card for small purchases, it is actually NOT advantageous. Credit cards are good only as a loan. The tricky part is knowing just how much you can make, within a specified time of your choice, knowing you will pay interest and a minimum payment every month. This is only if you cannot pay the complete balance in full.
I do use my CC the same way I would use a debit card. But Debit cards don't have the same protections that credit cards do. Especially fraud and theft protection.
Credit cards provide additional warranties or insurance for items purchased that may exceed those of the retailer.
Credit cards have much greater protection in most cases for those whose cards are lost or stolen. As long as the customer reports the loss or theft in a timely manner, his/her maximum liability for purchases made after the card disappeared is $50. The Electronic Funds Transfer Act gives debit card customers the same protection from loss or theft – but only if the customer reports it within 48 hours of discovery. After 48 hours, the customer’s liability rises to $500; after 60 days there is no limit.
To learn more about why credit cards are better than debit cards (if you have the self control to use it right), here is an article.
http://www.investopedia.com/articles/personal-finance/050214/credit-vs-debit-cards-which-better.asp
Exactly !
Which goes back to the use of skimmers which I posted previously. I can go through my bank's drive-thru with a personal check for cash; it's just as convenient and I don't have to worry that maybe my account number was just hijacked by a thief.
same here. If the CIA can be hacked,anybody can be.
shareI only use cash, and in rare circumstances, money orders.
I would never have a bank account.
No bank account at all? If all your money is hidden in your house somewhere, (hopefully not literally under the mattress) what happens if your house burns down?
shareAmazing that you're able to pull that off in today's world but then, " going off the grid " is becoming somewhat trendy.
share