Are Credit Cards Weapons Of Mass Financial Destruction?

The answer depends on if your name is Saddam Hussein, although proponents would say no proof was ever found!  You hear so many stories of consumers up to their eyeballs in credit card debt, and I’m just wondering WHY?  Credit card debt is the most expensive debt out there, second only to usurious rates of loan sharks.

Perhaps the reason why is because credit cards are ubiquitous.  According to the US Census Bureau, there were 173 million credit cardholders in the US in 2006, using 1.5 billion credit cards?  That’s right, the ratio is almost 10 credit cards to every one user, with transaction volumes of over $2 trillion a year!  No wonder the US consumer gets in trouble, and why credit cards are such big business!

My view on credit cards is quite simple: Use credit cards only to your advantage, and never let them take advantage of you!  Whenever you see your credit card misbehaving, you should think to yourself “Bad boy!  Bad, BAD!”  I think my wife tells me this sometimes, but I try and tune it out.

Joel is hosting a $500 American Express giveaway, and gosh darnit, I’m entering to give myself a chance to win.  In “You’re Rejected!  How I Use Rejection To Motivate Me Every Single Day,” we discuss how success is a numbers game.  The more you put yourself out there, the higher the chance you have to succeed.  Here’s my attempt to win and use the proceeds to buy toys and clothing for underprivileged children this winter in San Francisco.  The program is called “Toys 4 Tots.”

TWO MISSLES IN MY WALLET

My first card is the American Express Corporate Card necessary for business bookkeeping purposes.  You see, all client expenses must be paid for by my Corporate AMEX card so the company can match costs with profits.  Makes, sense.  Too bad I have to pay the bill every month, and then get reimbursed, thereby creating unnecessary delays, negative working capital, and occasional late fees.  There was a time when having an AMEX Corporate Card was very cool (your early 20’s), but it soon gets old.  At least their service is solid.

The second card is my personal Citibank Home Rebate card which gives me a 1% rebate on all purchases to pay off the principal of my primary residence.  I’ve had the card for six years, and the card has paid off more than $1,700 worth of principal already.  What’s more interesting to note is that based off a 5-6% mortgage interest rate, the real savings is thousands and thousands more because of interest saved over time.

Of course, nothing is perfect.  I woke up one day to find my 6.99% Citibank Home Rebate Credit Card rate jump to 14.99% duringthe height of the recession last year.  Funny, because the 10-yr yield was still in the low 3%-range, and the Fed Funds rate was below 1%.  This pissed me off, and I immediately called them to lower the rate.  Again, don’t let credit card companies and banks take advantage of you.

PACKING AN A-BOMB

If someone were to kidnap my pet rabbit and force me to sign-up for another credit card to save his life, I would have to pick the Visa Black Card. The selection of credit cards Joel provides is impressive, but only the Visa Black Card is well, black.  In addition, the description says “Membership limited to only 1% of US residents!” Don’t you want to feel special if you pack a new financial weapon of mass……… joy?

WEAPONS FOR PEACE

A credit card is a wonderful financial tool if used properly.  I put everything on my personal credit card because 1) It helps record all my transactions which are divided into different categories I can review every month, 2) The 1% home rebate saves me money, but is not the primary reason for use, 3) I don’t like carrying over $100 in cash, and 4) A credit card provides consumer protection against fraud and defects.

But I must ask again, why on earth would you EVER not pay off your bill in full every month? Not doing so is akin to pulling the grenade pin and not letting go!  Did you know that if you paid off $999 of your $1,000 balance, most credit cards will charge you interest on the full $1,000 balance?  Credit Card companies are marketing geniuses.  Make sure you’re Albert Einstein.

The credit card companies already make a small commission off the vendor every time you use the card, don’t let them charge you interest as well!  Credit cards are not weapons of mass financial distraction if used properly.  Instead, they are a necessary part of day-to-day transactions, and there seems to be no turning back.

OTHER HANDY USES FOR CREDIT CARDS:

1) Spatula when there’s a hole in the wall to fill with caulk.

2) Ninja star when I’m in a dark alley and someone is coming after me.

3) Babe magnets at a bar when I tell the bartender to “leave it open.”

4) Lock pick when I leave my keys in the house.

5) Tooth pick after a good ‘ol San Francisco crab feast.

STRONG RECOMMENDATION

Barclaycard® Ring MasterCard® – 1% Back on Balance Transfers – This great card has the lowest APR I’ve seen in the market today at 8% compared to the average credit card interest rate is 15%. You get 1% back on all balance transfers made in the first 60 days of opening an account and there is no annual fee or balance transfer fee. There’s a fantastic social community of Ring MasterCard holders once you join to interact with and save money.

The Hawaiian Airlines® World Elite MasterCard® – Hawaiian Airlines is hands down the best airlines in America. Their service is impeccable, they provide food, snacks, and drinks included in your air fare, and each seat comes with a USB charger. This Hawaiian Airlines card gives 35,000 bonus miles if you spend $1,000 within the first 90 days, gives you one complimentary bag to check-in, and a one-time 50% off discount off your companion’s air fare! Round-trip ticket prices range from $450 – $1,200, so that’s a $225 – $600 savings right there to paradise! You also get $100 off a companion tick for roundtrip coach travel between Hawaii and North America each year, 1 point for every $1 spent, and 5,000 annual bonus miles after $10,000 in annual spend. The annual fee is only $89. Oahu is my home state and it is the most beautiful place to vacation!

Check Your Credit Score: Take a moment to check your free TransUnion credit score through GoFreeCredit.com, a company I trust. 30% of credit reports have errors, which could put a serious hamper on your refinancing or new loan borrowing abilities. I had a $8 late payment I didn’t even know I owed crush my score by 100 points come up during my last refinance. The average credit score for rejected mortgage borrowers has risen to 729 due to more stringent lending requirements. Do you know what your score is?

Updated as of 11/27/2014

Keigu,

Financial Samurai – “Slicing Through Money’s Mysteries”

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. Gordie says

    I’m 34 years old and haven’t owned a credit card to date. However, with the Internet I sometimes want to buy something online and I need to pay by Paypal or credit card. I’m lucky I have a friend who always lets me use their card and then just give them the cash.

    I’m guessing one day I’ll have to bite the bullet and get one, just for the convenience of buying things online.

    I don’t think people who are vehemently opposed to credit cards are weak, they just see the many downsides to them.
    .-= Gordie´s last blog ..Why You Should Make Your Life Remarkable. =-.

  2. says

    @Gordie
    I’m impressed you’ve never owned a CC to date! They aren’t that bad, really! :) I guess one can view Paypal as the Internet debit card yeah?

    I’d think that traveling around in China would encourage you to want a CC for fraud protection and convenience? I just can’t imagine having no credit cards when living or traveling abroad. And that’s probably b/c we both grew up all our lives with a different attitude towards these cards.

  3. says

    The ones who can’t manage their credit card, need some financial “guru” like Dave Ramsey.

    The mantra on many of the personal finance blogs is no debt. Which to them means slicing and dicing their credit cards. Going all cash is the mantra they say. How silly is that if you can use credit cartds to your advantage? In martial arts part of the art requires getting your opponent “off balance”. Use a credit card with point rewards and paying it monthly so it’s “off balance”. It’s using their offense and making it into a usable defense.

    Like most things in life, using credit cards are easy, but becoming a ninja is all but for a select few.
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  4. says

    @Investor Junkie
    “Off balance” i like that term! Like Judo I guess, push and pull.

    The use of the word “ninja” is bad here on Financial Samurai! A ninja is a sneaky devil with no honor. That’s why I have my “NINJA FILES” category! lol.

    @Evan
    Haha, yeah, not many people do take Discover! I’m wary of anything CASH BACK, b/c that cash will just go in and right out immediately to buy something.

    I like the home rebate concept, b/c it gets flushed into paying off debt automatically. Feels good!

    BTW, left a msg on your latest post, but donno if it went through. An error then duplicate msg came up when i clicked send again.

  5. says

    @admin

    Well isn’t that the purpose of using the cards to your advantage? You are being sneaky as your intent is to pay the CC monthly, not carry a balance like the CC want you to do. The rewards are their “bait” and we take bait without getting hooked on the fishing line. I call that a sneaky devil with no honor in my book. ;-)
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  6. says

    @Investor Junkie
    OK, you’re right! I am a sneaky devil, at least with my home rebate card. What have they gotten for the $1,700+ in principal they paid down in return? Not much, except for now maybe some publicity! But even now, I don’t think the card exists anymore sadly enuff. Weird.

  7. says

    @admin

    Like a Las Vegas casino, they have you coming AND going. They make money either way, off the interest people keep on their cards, and the merchant for each transaction you make on the card. Oh if I could only be Visa. “The Investor Junkie card, don’t day trade without it”
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  8. Mark says

    I try to make every single one of my purchases on a credit card. If you can use credit cards responsibly, then you can really get some great deals. I use an old Chase Rewards card that still gives me 5% back on groceries, gas, and drugstore purchases, and then I use my Citi Forward card to get 5% back at restaurants, bookstores, and movies. Even better is that I usually buy groceries for my whole apartment and get cash from the roommates, so I make out even better. These categories cover some of my largest expenses not including rent.

    If you can control your spending, sign up for auto bill pay, and make sure that you always leave a cushion in your bank account, credit cards can be a great financial tool to both build your credit and get you some great discounts. The big problem arises when people have the mentality that because they’re using plastic, they won’t have to pay for it until later and therefore buy things that they can’t afford.

  9. Geek says

    People not using credit cards are at a big disadvantage – the credit card company charges a percent of each purchase to any retailer who supports that card. For Visa, maybe 3%, for Amex, a bit more (that’s why not everywhere supports Amex). The cash payers are often subsidizing the credit card people, because prices are adjusted upwards to make room for money lost (by retailers) to credit card companies.
    So I say if you can possibly use a card responsibly, and get rewards, do so. Otherwise you’re paying a secret tax-like fee.

  10. neal@wealthpilgrim says

    Credit cards don’t kill your financial situation….people do.

    I am a big believer in “Peace through Superior Fire Power”. That’s why it’s so critical to be on top of your financial situation.

    Don’t track your spending and don’t track your plan…and the enemy will obliterate you.
    .-= neal@wealthpilgrim´s last blog ..Who Is The Financial Decision Maker In Your Family? =-.

  11. says

    Re the black card … are you sure its Visa?
    American Express has had one for a veeeerrrryyyyy long time, except I believe it was referred to as the Ebony. It was so exclusive that even the employees of AX did not know it existed unless you were in the upper echelons of the executive suite. There is a hefty annual fee, you have to be invited, the perks are out of this world, the sky is the limit re spending and… 1% would be on the high side of the population that may have it.

    So if Visa has an exclusive “black” card, Amex has lost its franchise again … they were the first to introduce gold & platinum but did not (or maybe could not because they are just colors) trademark.

    best………….valentina
    .-= Valentina´s last blog ..Reflections On 2009 and On Things Yet To Come =-.

  12. says

    I had the GMAC card for my previous mortgage and it worked out great (as long as I kept the balance low or zero). I also took full advantage of my American Express Blue Card which gave me points for purchases and periodic discounts at select stores, and I found the point way to use the reward points was to order gift cards from Home Depot. I feel like I made out like a bandit with that deal.

    Anymore though I use my USAA debit card which is also a MasterCard, that way I get all the benefits of having a credit card without the hassle. Maybe that’s something Gordie could look into doing with his bank.

    I knew someone who would use multiple credit cards as 30-day interest free loans and play the credit card game to his advantage, so I did the same thing for a while and it is possible but honestly too much like work. I’m sticking with my debit card for now.

    Great idea for a post!
    .-= MBAbriefs´s last blog ..Develop your own marketing plan – part 5 =-.

  13. says

    vehemently … spending habits:::
    No, I think they got burned in the past and are wiser now.

    own a card … free … fraud protection, and convenience?:::
    Not sure, I love my credit cards! I always pay off the balance though. Besides, as long as they don’t charge you an inactivity fee, it’s a expensive but viable emergency (emergency) source of funds.

    Why … advantage of them like masochists?:::
    Most don’t take the time to research it online (after all reading credit card details isn’t like reading a financial samuari post!!! ;) )

    think this post can win the challenge:::
    Yes, this post is great, almost as good as your “You’re Rejected! How I Use Rejection To Motivate Me Every Single Day” post.

    One last think, I got that Visa “Black card” offer in the mail, but it’s annual membership fee is something like $298 dollars. I like the look of it too (and the fact that it’s carbon graphite!), but I’m not going to spend that kind of money every year.

    If you want a mostly black credit card, go with “Citi Diamond Preferred”… No annual fee! ;) (or at least not yet Grrrr)!
    .-= Don@MoneyReasons´s last blog ..Are You Thinking About Refinancing Your Mortgage? You Should Be… =-.

  14. says

    @neal@wealthpilgrim

    “Credit cards don’t kill your financial situation….people do.” Are you from the NRA? :-)

    Guns don’t kill people, people do!

    I agree not enough responsibility on the user of the card. “I didn’t know the card was loaded..”
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  15. says

    @Valentina

    Actually with AMEX it’s the “Centurion Card” aka black card. At one point it was a complete myth, but AMEX decided to take the myth and make it reality. Visa copied and followed suit. I’ll Centurion Card as long as someone else pays the yearly fee of $2,500.00
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  16. says

    “Readers, do you think those vehemently against credit cards are weak because they cannot control their own spending habits?”

    I think it’s mostly an awareness that credit cards were established and exist mainly for the purpose of earning money for the banks and enhancing sales for merchants. Both of those activities come at our expense in the form of fees charged by the banks, and increased sales for merchants.

    Though credit card advocates hawk credit cards as money management tools, they aren’t set up for that purpose and they’re getting harder to use in that manner because the banks know what’s happening and they’re moving to plug the holes.
    .-= Kevin@OutOfYourRut´s last blog ..Face the Future Informed and Without Fear =-.

  17. Jason says

    Use credit cards to your advantage (miles, cash back, etc.) but pay it off every month and don’t pay an annual fee. Can’t go wrong there. Makes it much easier to see where your money is going if you track your credit card transactions (say in Quicken) versus using cash. Personally I think debit cards are evil because of the way the banks use them to garner fees and how any merchant can put a hold on your account for whatever they want.

  18. says

    @Geek

    Geek :
    People not using credit cards are at a big disadvantage – the credit card company charges a percent of each purchase to any retailer who supports that card. For Visa, maybe 3%, for Amex, a bit more (that’s why not everywhere supports Amex). The cash payers are often subsidizing the credit card people, because prices are adjusted upwards to make room for money lost (by retailers) to credit card companies.
    So I say if you can possibly use a card responsibly, and get rewards, do so. Otherwise you’re paying a secret tax-like fee.

    This is a great point that many people do not even think about. Well done in pointing this out.
    .-= Credit Card Chaser´s last blog ..Blippy.com Wants You to Show the World Your Credit Card Transactions =-.

  19. says

    @Jason

    Being a biz owner who has over 70% of my transactions are credit cards, I’m amazed how many of my customers (mostly small businesses themselves) use their debit card with us.

    This is an easy blog post I should do… NEVER use a debit card as a credit card EVER! Use PayPal over a debit card if you don’t have a credit card. There I feel better now :-)
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  20. says

    @Credit Card Chaser

    Let me also give it to you from a business owner’s perspective. I look at it this way. I would much rather deal with a 3% credit card transaction, then waiting for a dumb check to come in the mail, and having my billing people try to collect for the late payers. That 3% fee is MUCH cheaper in my case, than to hunt down the slackers.
    .-= Investor Junkie´s last blog ..Should I Buy Gold? =-.

  21. says

    @Don Money Reasons – Thanks for the support man! You’re the only one to answer all my questions :). If I win, I’m gonna have to provide you a shout out at the very least! Maybe we use some of the proceeds for a meet up trip to Vegas, if there’s any money left over after buying the toys! :)

    You should just keep the black visa CC u got, and bust it out at parties and stuff even tho you don’t activate it. The ladies will love it, and the guys will be envious!

  22. says

    Investor Junkie

    Aha! so that’s the story behind that one! Once upon a time I saw someone pull one out at a swanky restaurant so knew that it existed … you should have seen the change in body language when the waiter picked it up (and my host grew in esteem in my eyes !!!! – of course I didn’t want to seem like a klutz and make any comment)… but the Centurion is the
    Amex trademark, it is on all their cards, so are they just calling this one “The Centurion”?

    best…………valentina
    .-= Valentina´s last blog ..Reflections On 2009 and On Things Yet To Come =-.

  23. says

    Hey FS! Thanks for the post. I do’t get why anybody would carry a double digit interest credit card balance too. There are some weak, not very disciplined people out there no doubt!

    Geeks’ point is great and very true. Prices bake in costs, always.

    Regarding your and @Credit Card Chaser
    ‘s question and on whether you will be able to win or not? Seems to me you have a very good chance. Here’s why:

    1) I don’t see any other sites in the Top 100 personal finance sites on Wise Bread who have highlighted this competition, let alone dedicated a full post to it. In fact, I’ve only seen one other dedicated post to this competition, but I may have missed some.

    2) The other posts I have seen enter the competition aren’t as witty and orignal. Looking at the comments of one post, there’s only 3, one of which is the author’s own.

    3) Joel is an entrepreneur and a businessman. If that’s the case, he should try and build a relatonship with a site that can help promote his product the best. His selection isn’t random, so he should weight the future benefits. I’m assuming if you win, you’ll provide a shout out, and the good will to you would be immense. That’s probably worth more than anything.

    4) You’ve followed all his instructions, which is frankly half the battle. The other posts I’ve seen don’t link back to a credit card on his site for example.

    5) His competition is AMEX sponsored, and you highlight in your post one of your two cards is an AMEX. That’s got to count for something.

    Finally,

    6) You’ll use the proceeds to help the kids!

    I donno about you, but I’d feel pretty confident. It’s obvious you didn’t just slap the post together, but put a lot of thought into it. If there was a vote, I’d vote for you. :)

    The Genius
    .-= The Genius´s last blog ..Accounting programs ranked nation’s best among small schools =-.

  24. says

    I’m all about using credit cards, but only because I pay them in full each month. I currently have a cash back card that gives me a minimum of 1% on everything, with other categories giving me 3%. It’s nice and I end up receiving a couple hundred dollars back each year.

    Just a note for Gordie (first comment) – check out eBillme.com. You can shop online and check out with them, and then pay from your bank account (they send you a bill via e-mail and you use an electronic check to make the payment). It’s secure and no one ever gets any of your financial information. They have quite a few retailers, and you can earn rewards credits, so it may be a good option for you or anyone else that doesn’t have a credit card.
    .-= Patrick´s last blog ..Best Credit Cards: Cash Back and Rewards Points =-.

  25. says

    I love having a credit card. I always pay the full balance and if stuck will borrow from a low interest line of credit. Using your credit card responsibly is key. I get dividend dollars so at the end of a year I am better off using my credit card than using cash. Boom.
    .-= Smac20´s last blog ..Telus PR Push – Should you Buy It? =-.

  26. says

    Samuari-san

    I spent two days between planes, trains and rentals drafting a post for the same competition. A delayed flight, sitting on the runway for over an hour and then a wait for a gate caused me to miss the deadline. In the end, it would have been pointless; you and the tots deserve th $500!

    If it was a vote the FS would have mine! Nice job.
    .-= LeanLifeCoach´s last blog ..What’s the ROI on an iPhone? =-.

  27. says

    @The Genius
    Hey man, thanks for that thorough analysis! Hope Joel doesn’t read it though, cuz it might back fire! lol.

    @LeanLifeCoach
    Lean, where’d your travels take you? Thanks for your nice words. It would be nice if I won, but like most of these competitions, I don’t count on it. Just happy to give it a shot!

    BTW, I don’t have an IPhone, and I don’t want one. My work blackberry is all I need, and that’s almost too much!

  28. says

    Valentina,

    I read that the most extravagant purchase done on an Amex Black is a private jet. A myth?

    About the questions:

    1. I would say 50% because they realise that they’re weak, the other 50% are Dave Ramsey’s followers :) I don’t know. Who knows?
    2. Past trauma or maybe because some financial gurus out there are calling credit card ” the work of the devil” and people who refuse to think for themselves just follow suit, like a herd.
    3. From my past experience, it’s my weakness for pretty things that took advantage of my credit cards.
    4. Indeed, I don’t think you’ll need to bribe him.

    Good luck, mate!
    .-= Bytta @151 Days Off´s last blog ..Is Frugality the New Superiority? =-.

  29. says

    I hope you win the contest! Good post. Even though you might cast me as “weak” because I got into financial trouble with credit, it had as much to do with trying to tread water as the recession hit, the tenants in my rentals stopped paying due to layoffs, my property values took a dump and my husband lost his job. I was a terrible accountant in a crisis and made some bad choices, for sure. The problem was less about the amount I owed as the interest and fees I ended up paying to recover and how long it took me to realize I could not sustain, much less gain ground in my life until I stopped using other peoples money for my convenience. I am not against credit cards per say, I am against borrowing to finance your lifestyle because the lender is always going to find a way to make you pay for the privilege which, in most cases, means you will pay more for that item than if you paid cash. And for what? To buy something you probably didn’t need and pay for it with money you don’t have and if you do have it, why borrow money to pay for it? I still have a credit card for major emergencies, but once I build a good emergency fund it will no longer be necessary. My debit/visa is connected to an account that has only the funds it needs for that month’s budget. I check on my accounts daily so I will catch a suspicious charge and my credit union will refund money taken from my account fraudulently. I also use PayPal. Rewards cards can come in handy, but those programs are quickly fading from the landscape, as are the no annual fee cards, and I want to keep life simple. Check your statements to make sure you are not being charged some small fee like the Shell card that charges a minimum finance fee of $2. And be aware that some companies are canceling accounts without warning for being unprofitable (Citibank was one of them.)For me, a sustainable lifestyle is simple, ethical and cash only.

  30. says

    @Investor Junkie
    Yikes, 79.9% interest rate? Who’s stupid enough to continue using that card? Shame on the CC company.

    @Tracy
    Hi Tracy, thanks for your comment. I don’t think you’re weak, b/c it’s obvious you’ve learned from the past and have moved forward.

    Using a CC to fund an exagerrated lifestyle does sounds stupid. I hope your husband can get back on his feet in 2010, and I wish both of you the best of luck. Things definitely seem to be improving, so I’m hopefuly.

    @Peter
    Thanks Peter! Can’t believe I won! You had a great post yourself, and congrats on winning the comments portion of the competition!
    .-= admin´s last blog ..Why The World Forgives Rich And Famous People For Cheating =-.

  31. says

    I didn’t win the Amex contest??? :( LOL. Congrats. And I love your cause to spend it on :)

    I am weeeaaaaakkkk! Yes, credit cards are evil to me. I’ve never PIF’d them each month. I am killing them all, but one emergency card. Death to the CC. And because I realize my weekness with credit cards, I need to do this.

    It is not worth it to me to Try and be good with them so that I can benefit from the cash backs, etc…

    It’s just gonna be me and my happy ole debit card. Its working In my favor so far. Think I will keep it going this way for me.

  32. says

    @Len Penzo
    Thanks my fellow Californian who isn’t experiencing the blizzards out west! It’s kinda weird, cuz it’s sunny outside and I’m about to go hiking.

    @Money Funk
    Sorry Money Funk for not winning :( Will donate a basketball on your behalf this weekend! :)

    Gotta cut up that card then if you never PIF. Seriously, don’t let them take advantage of you!

    BTW, If you want to borrow money in the future, let me know and I will beat lending club’s rate by 1%! Seriously, if you are committed to consolidating your debt, paying it off, or whatever, I will lend to you. We can talk about it off line if you wish!

  33. says

    @admin

    Wow, thanks for the offer! But the husband and I actually went a different route that saved us more money than LC. I’ll blog later. :)

    Thank you for donating a basketball on my behalf. :) Totally great what you are doing.

    I think eventually I will beable to use CCs to my advantage after I kill all this debt. Being in debt and on a limited budget makes credit cards tempting. But, when the debt is paid and I have tons of money in the bank then I can make the cc’s work for me.

    BTW, enjoy the sun. I was telling a friend I should have taken the family Christmas photo at the beach with this Cali weather. LOL
    .-= Money Funk´s last blog ..Menu Plan Monday =-.

  34. says

    Ah, another interesting post that asks lots of interesting questions. I think that if someone recognizes that using credit cards causes them to overspend, and does what they can to avoid the temptation, they aren’t weak, they’re simply cautious, like alcoholics who avoid bars. That said, the idea that nobody should ever, ever use credit seems downright misguided; there are people who can and do use credit without running into huge problems, just as there are people who drink in moderation without having a problem.

    As for why people don’t want to own a card that offers them a 30 day interest-free loan, I think it goes back to the potential for overspending. I know that I spend significantly more using a credit card than I would if I were forced to rely entirely on cash. Now, much of that is spending I can’t really avoid (gasoline, food, Christmas presents for family members), but still, because I have a credit card, I don’t spend as much time trying to find a bargain or otherwise conserving my money.

    I think there are many reasons people let credit card companies take advantage of them. Some have poor credit, low-paying jobs, and believe that credit cards are the only way to sustain their (possibly unsustainable) lifestyles. Others don’t realize that only paying the minimum will lead to interest charges eating them alive (and sucking the marrow out of their bones). And still others have come to that realization, but had so much in debt that the interest and other fees make it hard for them to get ahead.

    Yes, this post definitely deserved to win; how did it do, since I seem to have missed the entire contest?
    .-= Roger´s last blog ..Small Business 101: Are YOU Suited to be an Entrepreneur? =-.

  35. Andrea M says

    I am new to this site and I wanted to post a comment about my experience with a debt settlement company. I just completed a program with Elite Financial and they saved me over 70% of my debts. Although I have seen my credit score suffer because of the program but that is nothing compared to the amount of stress that has been eased. I saved almost $37,000 over the last 2 years. I’d definitely recommend them to anyone that needs help.

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