Do you ever really "HAVE TO" use your credit card for things?
We had another interesting question in our "blogger brain trust" round up this week, and I thought i'd share it :) If you remember, the last one i participated in was regarding the Bill of Rights for Credit Card Holders - i got pretty fired up with that one!
Today's question is pretty cool cuz you ALWAYS here people talking about "having to" put things on their credit cards, which strikes me differently depending on my mood. The logical side says WTF? NEVER do that! While the "that's life" side says...well....that's life! Either way, it's def. interesting.
The Question:
I think "Wow, they must have REALLY been in a sucky situation!" I'm more of a positive thinker, so i tend to give people the benefit of the doubt from the get-go. I bet most of the time the people confuse NEEDS with WANTS, but that usually pops in my mind later if i'm giving it more thought ;)
There is nothing wrong with putting NEEDS on your credit card to get by - this is life, and it's not always perfect. If you need food or shelter, and have absolutely no money in the bank, then you're pretty much out of luck.
It also depends on the timeframe we're talking about here. If we're talking about a few years here, then obviously there are some other ways to get your hands on money - loans, friends, etc. But i see no problem w/ loading up the card for a few months and then working to pay it off as quickly as possible.
I personally put everything i can on my credit card to manage my budget - gives me 30 free days, ya know? I pay it off in full each month, but worst case scenario you rack up a little interest when needed. That's what it all comes down to really - the needs vs wants.
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You can check out the other bloggers' responses over at GetOutofDebt.org where they're complied each week - we all have our unique voices :)
Today's question is pretty cool cuz you ALWAYS here people talking about "having to" put things on their credit cards, which strikes me differently depending on my mood. The logical side says WTF? NEVER do that! While the "that's life" side says...well....that's life! Either way, it's def. interesting.
The Question:
"What goes through your mind when people say that they HAD to use their credit card to get by? Is using a credit card when you can't afford to pay a smart or necessary thing to do?"My Answer:
I think "Wow, they must have REALLY been in a sucky situation!" I'm more of a positive thinker, so i tend to give people the benefit of the doubt from the get-go. I bet most of the time the people confuse NEEDS with WANTS, but that usually pops in my mind later if i'm giving it more thought ;)
There is nothing wrong with putting NEEDS on your credit card to get by - this is life, and it's not always perfect. If you need food or shelter, and have absolutely no money in the bank, then you're pretty much out of luck.
It also depends on the timeframe we're talking about here. If we're talking about a few years here, then obviously there are some other ways to get your hands on money - loans, friends, etc. But i see no problem w/ loading up the card for a few months and then working to pay it off as quickly as possible.
I personally put everything i can on my credit card to manage my budget - gives me 30 free days, ya know? I pay it off in full each month, but worst case scenario you rack up a little interest when needed. That's what it all comes down to really - the needs vs wants.
-------------
You can check out the other bloggers' responses over at GetOutofDebt.org where they're complied each week - we all have our unique voices :)
Labels: brain trust, credit cards
posted by J. Money at
9:38 AM
10 Comments:
I thought you charged your cady on CC, no? :)got ya! I ended up charging tuituion fees on my CC I had no other choice since I was an international student.
I am trying not to use my CC at all because I have a hard time paying it off if I use it for general purposes. I am good with the card I use only for gas, for example, because I budget that and I pretty much know what it will come in at each month, but when I used my credit card for everything I would lose track and frankly spend a lot more than I meant to. Using my debit card and tracking spending online in my checking account has been a lot more effective for me. Once I get that CC paid off, I will use it a lot differently (if at all) than I did in the past.
When I hear people HAD to use their CC, my reaction depends on the purchase - emergency car repairs, Chicky's tuition, those are perfectly understandable purchases. But "having" to use your CC for a new iPod? Not so much.
Yup, i sure did Chicky! I actually have 2 credit cards: the one i threw the Caddy on (instead of taking out a more expensive car loan) and the other for everything else as to not mix interest rates and all. Works for me, but not for everyone.
Like my girl Dawn! You have a GREAT system going on there, and i'm all for sticking to what works :) I actually used to go the debit/checking route only, but i got bad w/ tracking and overdrawing and all...haha...so you and i are like the opposite :)
i put everything on my card, but i don't have to. i think the ideal situation is that you should never "have to" - ie, you have an emergency fund and you budget for other expected items (gifts, home repairs, etc).
so when i hear someone say they "have to", then i think about how they aren't managing their funds properly.
that being said, some people are really stuck in the paycheck-to-paycheck cycle. if something unexpected (health care costs, let's say) comes up - the cc is often the only option. there's a lot more wrong there than someone's budgeting skills.
"Have to" certainly implies that you have no other choice, which is never a good situation to be in. I think a lot of my skepticism comes from all of the stories you hear about people living extravagant or unnecessary lifestyles based on credit -- thats no good. But you're right, when it comes to basic life needs ... if you can't get by on cash, you have to do what you have to do. Just get out of that hole as soon as possible!
Once you move past those "life necessities," credit cards can be such a powerful tool, but you have to be able to cover what you're spending! I, too, put almost everything on credit for not only budgeting and tracking reasons, but also to take advantage of the rewards out there.
I try not to use my credit card often, but sometimes, I do "have to" use it. Prime example: my 3 1/2 year old laptop has started acting funny over the last few months, and the other night, the power cord was causing sparking sounds and smells to come from the computer. I have some emergency savings, but it's for real emergencies, like my car breaking down. I decided it was time for a new computer, and didn't want to deplete my savings and I have a few big freelance writing checks coming in the mail, so I put it on the plastic. Also, since the holidays are almost here, I asked my parents if they'd help me pay for a little bit of it for my Xmas present. So OK, I guess I didn't HAVE to buy the new computer, but I risked a blow-up, and I didn't HAVE to put it on my credit card, but I know I will be able to pay it off quickly, and I would hate to use my true emergency savings for it. So I think there are times when it definitely makes sense :)
My first thought when someone says they "had to" use their credit card is that they probably took the no-brainer solution to a temporary problem instead of really giving some thought to alternatives. But hey, they've got one up on the folks who don't see credit card use as something to be avoided!
When I say "had to", it refers to putting non-business expenses on my CC because there's no other/safer way to buy something. Like an airplane ticket. But I still pay off the full balance.
Sometimes I'll put something on the credit card because there more "money" available on my CC than in my bank account. For example, if we have to spend a few hundred dollars on car repairs, I often put in on the CC, then pay it off when the money from our emergency fund gets transferred to the appropriate account. If I just paid the repair bill with the check card, it may end up causing problems with getting bills paid and such while we wait for the emergency money to come in.
ALL words of wisdom my dear friends...let's just hope we never "have to" get into any of these horrible situations :( I gotta tell you, I'm freakin' elated just to have a good job w/ everything going on!
but, just in case, i have both our credit cards maxed to out in available credit ;) $30k on one and $25k i believe on the other. Hum...i might have to post about that!
My view is that if you can avoid the credit card do so by all means. I believe credit card should only be used when you require emergency funds. There is no point using the credit card for small payments and build up payable interest for yourself.
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