Comments on: Credit card use – my thoughts

By: Bob

Bob — Tue, 20 Oct 2009 03:00:09 +0000

@Jennifer,
if you have had the credits a while, and are concerned about having a good credit score, I would probably keep them open. Having cards with a long history is helpful…

By: Jennifer

Jennifer — Tue, 20 Oct 2009 00:28:56 +0000

I have two credit cards (one will be paid off by the end of next month) that have balances and about 3 others that don’t. After I get my cards paid off (hopefully by the end of 2010), I don’t plan on using them again. It is just too easy to put a “small” purchase on them that you plan to pay off at the end of the month. Then, when you get the bill, you find all of those small purchases added up to a larger bill then expected. As you said, a person who is very disciplined will probably not have this problem, but I don’t want to take the chance.

Quick question that is off topic a little:
After I get my cards paid off, is it better to keep them open with no balance, or just close them? I’ve heard that having a large gap between what you owe and what is available can help your credit rating, but I don’t know if that is true. Anyone know?

By: Jason @ One Money Design

Jason @ One Money Design — Sat, 11 Jul 2009 13:59:08 +0000

Bob, great discussion topic.

If you listen to Crown Financial Ministries and Howard Dayton, you’ll hear it’s okay to have one credit card, if paid off each month. Dave Ramsey won’t go there. He leans heavily on the side of no credit cards because it’s like playing with fire in that you’ll eventually get burned (we’re all human and can fall into temptation).

Our family has one credit card. I think it does relate to your ability to manage wisely and whether or not you have a steward’s mindset. If someone continually has trouble paying it off each month or easily tempted with instant gratification, it’s probably not a good idea to have the card.

We use the card out of convenience and never unless we know we have the cash to pay it off immediately or in the next coming paycheck. Sure, the next paycheck may not come, you never know, and that’s why it’s not used for items outside our monthly budget.

By: Tom @ Canadian Finance Blog

Tom @ Canadian Finance Blog — Fri, 10 Jul 2009 17:10:57 +0000

I voted for “pay off the balance each month”. I use my card for the rewards and to not need to keep such a close eye on my chequing account every purchase.

By: Eden

Eden — Tue, 07 Jul 2009 18:48:15 +0000

I’m in the no-credit-card-only-debit-cards camp. I don’t see any reason to change that either.

The only thing that tempts me is an Amazon.com Visa since I shop there so much I’m sure the points would add up quickly. However, I don’t have any plans of getting a credit card any time soon and probably won’t again.

By: Darrin

Darrin — Tue, 07 Jul 2009 17:36:20 +0000

We use the credit card for almost all of our monthly expenses. What I like about it is that if it gets lost or stolen we are only responsible for the first $50.00 that someone else charges. Unless the laws have changed, someone could wipe out your checking account if the same thing happens with a debit card leaving you with very little recourse.
Do we spend a little more each month? We probably do but it gets paid off each month. We also get a small percentage back every quarter.
We are what the credit card companies call dead beats.

As for late fees and over charges, there is some sense of personal responsibility.

By: Bob's Occasional Musings

Bob's Occasional Musings — Tue, 07 Jul 2009 00:33:56 +0000

My wife and I have paid off our credit card each month now for about 20 years now. We use it mostly so we don’t need to carry around a lot of cash. We are slowly moving to using our debit card almost exclusively however. I would admit, I probably spend a bit more when I use a credit card then when I use a debit card and even less if I am using cash.

By: Mike Pastore

Mike Pastore — Mon, 06 Jul 2009 22:25:47 +0000

Credit card is indeed useful in times of cash insufficiency or if you want to buy something in installment basis. But the big overcharges and late fees are big headaches for card holders every time they neglect to pay their balances every month.

By: Craig

Craig — Mon, 06 Jul 2009 19:48:38 +0000

If you are responsible with your credit card use there is nothing wrong with it. As long as you can pay the bill in full each month, I don’t see anything wrong with using it.

By: Bible Money Matters

Bible Money Matters — Mon, 06 Jul 2009 17:47:23 +0000

In general I’m pretty anti credit card, and I don’t suggest using it as an emergency fund, or to pay for big purchases you don’t have the cash for. We do have one credit card, however, that we only use when we have the cash to pay off the purchase right away, which we do as soon as the purchase shows up in our account.

We figure we get a bit of extra money every year by doing this, we may as well get some money back from the CC company – in exchange for having their card, right? Of course we’re extremely disciplined about using them, and NEVER use them if we don’t have the money to pay them off right away.