7 Reasons To Use Your Credit Card For Everything

Wise Bread has an interesting post detailing 7 reason why one of their writers uses her credit card for everything. She finds it a useful tool for maximizing efficiency. Everything is all in one place! If you don’t carry a balance and are good with a budget, why not use a credit card as an organizational tool?

It’s great for accounting and spending reports. Since I don’t dole out cash, or make purchases on my debit card (and I rarely use cheques), all my monthly spending is nicely bundled into one report: my monthly credit card statement. Not only that but my current credit card of choice actually categorizes my spending for me, so at a glance I can see how I’ve spent my pennies for the month and year-to-date.

I don’t need to carry cash. Trips to the bank machine are few and far between, as $60 can last months depending on my spending needs.

Automated billing is great. Cell phone bills, utilities, cable, you name it. If I can sign up for automatic billing, I do. It doesn’t mean I don’t look at each carrier’s statement to ensure the charge is correct. But it does mean that on a monthly basis I don’t have to worry about paying any bills (other than my credit card!) – they’re already paid.

Do you use your credit card this way?

Top Seven Reasons why I use my Credit Card for Everything [Wise Bread]
(Photo:hamilton.lima)

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  1. JeffM says:

    Absolutely! There is no other way to go. If a place doesn’t take cards, they don’t get my business!

    Plus the benefit of card rewards adds another incentive to go cashless. Been that way since I graduated college and actually had income! :)

  2. benh57 says:

    Yes, this is exactly how i use my credit card.

    I did notice my credit report had a ding for ‘balances on credit too high’ though, even though i pay it off in full each month.

    I could probably prevent that by paying it more often so the statements say zero due.

  3. tinyrobot says:

    Amen. But there’s also the two, huge, hulking and awesome white elephants reading over our shoulders on this one:

    1) Buying things on credit cards, unlike using cash, not only guarantees you a great deal of buyer protection (price protection, fraud protection, replacement in case of theft or destruction within a certain time period) for when Best Buy sells you kitchen tiles instead of a Hard Drive, but also doubles the warranty on most items (or usually extends it by a year). If you don’t have to pay to replace something with a 1 year warranty and a 400-day lifespan (we all know it happens), that’s free money you don’t have to spend now!

    2) REWARDS! Paying for day-to-day expenses, major purchases and monthly bills can help the rewards points, cash back or miles stack up fast. I pay every monthly bill I can on our credit cards, and the points keep rolling in with every monthly bill cycle. So far I’ve flown around the world and scored a whole slew of goodies that would have otherwise cost a hefty chunk of dollars, all using only rewards points I’ve earned by paying bills I used to pay by check.

    Obviously, you have to be psycho about paying off your complete balance every month, no exceptions. But as far as I can see it, there is no reason to pay cash for anything. Aside from the whole off-the-grid factor, but come now.

  4. meballard says:

    I pay for everything I can with my credit card as well. I never spend more on my credit card than I could pay by check/cash, so I can easily pay off my credit cards every month. I am actually instituting an automatic payment for my full account balance every month with Bank of America (I had to call and ask them about it), so that I don’t have to worry about making sure I meet any deadlines.

    The points/miles do come in handy (and since I don’t pay any interest, they are essentially a freebie).

  5. ShadowFalls says:

    I use 3 Primary cards based upon protection and rewards. First is the American Express Blue Cash, the ultimate consumer card with cash back just for paying bills you were going to pay anyway, and extended warranty and no hassle protections.

    For those that don’t take American Express (Very few, but still some and for gas) Is the Walmart Discover Card. Cash back just for paying bills and buying food, and 3 cents off a gallon at Walmart’s pump (who tends to be the cheaper one) If I happen to be in the area.

    For those Mastercard and Visa only places, (not very common anymore) There is the Amazon Visa card. Rewards come in the form of $25 gift certificates for Amazon. It can be used for any number of random items, Amazon sells things from books to Kraft Shells & Cheese, There is bound to be something there of a good price you can use. Sadly my water company only accepts these two forms of payment besides cash and check.

    Sure I don’t use only one card, but I find prioritizing which one has the best benefits for the transaction, I use that one. As long as you are responsible, it is a non-issue.

    One thing I would like though, is something to be implemented by credit card companies and be controlled only by its owners. That would be limits. Imagine being able to set yourself how many transactions you can do a day on a particular cards, and the maximum amount for each transaction.

    Such a system would serve its purpose, would at least make a nice little perk anyways.

  6. Lee2706 says:

    We use our credit card as much as possible. It’s great since we get a rewards check at one of our favorite stores at the end of the year.

    I don’t think I carry more than $20 in my wallet at any time. Right now, I have one whole dollar sleeping in there. Same dollar from about two weeks ago.

  7. randombob says:

    I do this as well, with one important difference: I NEVER sign up for automatic ANYTHING.

    The problem with automatic payments is, whether the charge is right or not, the amount they decide to bill you is deducted. So if THEY fuck up, YOU have to fight to get YOUR money BACK. F – THAT. And if you cancel and they “accidentally” charge your account again? yeah.

    I had a bad experience with State Farm doing that with my car insurance. For an additional 3 months. It’s a pain in the ass to get that stuff taken care of. I vowed from then on that, I would NEVER, EVER sign up for automatic payments ever again.

    I mean, if you’re going to review the statement anyways, it takes a whole extra 15 seconds to pay the bill online at that point anyways…

  8. CurbRunner says:

    What happens in Las Vegas doesn’t necessarily stay in Las Vegas…
    The other credit card usage advantage really goes to those who disregard your privacy and track your every purchase in order to map profiles of your lifestyle and sell to whoever in the hell wants that info.
    Leaving credit tracks everywhere also allows the Government to compile all this additional data into your dossier.
    George Orwell was right, he just had the wrong year.

  9. yg17 says:

    @ShadowFalls: I’ve got the Amazon Visa as well, and don’t use it as often as I probably should. But I do put all large purchases and Amazon purchases on it (since Amazon purchases are worth more points) and every now and then get one of those gift certificates.

    Although I’m thinking about switching to the Volkswagen Rewards card since I’m getting a VW in a month. The points can be used towards maintenance. Both my Amazon card and the VW one are Chase cards, I wonder if they’ll let me switch mine. If not, I guess I’ll have to apply for the VW one and not use my Amazon one.

  10. krunk4ever says:

    It’s silly to say “stay away from credit cards” because you can easily put yourself deep into debt. It’s all about managing your finances and the author above definitely points out many a good reasons.

    A few more that I would add:
    * Interest free loan for ~20-30 days. Why not take advantage of it?
    * Cashback/rewards you accumulate adds up to typically / year depending on how much you spend. That’s $100-$1000 you won’t get if you had used cash.
    * Protection against services – if party doesn’t fulfill their end of their contract, it’s easy to withhold payment, while on the other hand if you had paid cash, you’re SOL.
    * Extended warranty – many credit cards adds 1 year or doubles your item’s warranty that you had purchased on their credit card
    * Protection against fraud – stolen wallet typically means all your cash is gone, but any fraudulent charges can be disputed. The max credit card providers say they can charge you is $50, but that almost never happens.
    * and the list goes on and on…

    That’s why I never really like the view that Consumerist.com has taken against credit cards. As I noted on another forum earlier. Give someone who can manage finances 10 credit cards and he’ll definitely come out ahead. Give someone who can’t and he’d screw up his life with just 1 credit card.

  11. BigNutty says:

    I always use credit cards also for the reasons pointed out above. Like RANDOMBOB I never sign up for automatic payments. This is where a lot of scam business get you.

  12. ncboxer says:

    Knock on wood. I’ve never had a problem with automatic payments. I have almost everything I can on automatic payment- car, house, cell phone, gas, electric, cable, garbage pickup, even my credit card. I canceled my old credit card because it didn’t offer automatic payment, and got one who did. I watch the bill and if I see something wrong, I call the company to dispute. Even if they screw up multiple months, I have enough in the bank to cover till they fix it.

    Why do I do all this? Because I am very forgetful and hate the hold on my life that bills had. I use to constantly worry when the next bill was due, and if the payment made it in time. I’ve gone on vacation before, and then gone “duh”, I forgot to pay the credit card bill (which leads to lots of fees). I currently have only one bill not on automatic payment (they make very hard to sign up for it).

    Like above I pay everything by credit card that I can and I like the rewards from the card.

  13. jeffeb3 says:

    I have three credit cards, and they are all of different types. That way, if I’m in the Bahamas, checking into a hotel, and their visa machine goes down, I’m not screwed.

    One thing to say about having some cash (assorted bills, up to $50) is that it makes it easier when eating with a bunch of people to split the bill. Most places are good about splitting it for you, but some places are not. Useful for sending people in the office for food too.

  14. Syrenia says:

    I use three cards — two to help me organize and the third as a security measure. I’m probably borderline insane, but here goes…

    Card 1: Basic living expenses (groceries, medicine, fuel)

    Card 2: Optional expenses (restaurants, gadgets, gifts)

    Cards 1 & 2 are always used in person, though with skimming being as easy as it seems to be, it remains to be seen if this is still worthwhile. They also help me quickly see how I am spending money.

    Card 3 is for all transactions where I am not present: online purchases, my gym and other subscription-type services, telephone orders, whatever.

    I could probably stop using the third card and just sort most of those accounts onto the “optional” card. I know about limited liability with credit cards and all that, but it’s a habit that I developed in the early days of internet retail and I can’t seem to shake it. It also makes it easy to see who to notify when the expiration date changes.

    It’s not much more effort when it comes to paying — type three numbers in online bill-pay instead of one — and I find the categorization useful for reviewing the statements when they come in. A strange charge sticks out like a sore thumb.

    All three are rewards cards and of course, I pay them off as soon as they come in. Like others here, I use cash only rarely. I never use debit cards.

  15. m.ravian says:

    this is something that i’ve wanted to do for a long time in an attempt to break my bad spending habits.

    my credit is kind of crap (no, i don’t know the exact score, but it’s probably rated fair), but i’m working on it. can anyone recommend a card that i can apply for (and get) to get me started on this? one with rewards or something?

    i have had a capital one card for about year now. it’s doing nothing for me. the magic is gone.

  16. Amelie says:

    I use credit cards for everything except:
    1. Prescriptions: I don’t want my health history in some data bank.
    2. Restaurant Tips: I like to give the server “more” by using cash.

  17. This is how we use our CCs (AmEx for virtually everything; Mastercard for places that won’t take AmEx) except I pay my monthly utility bill by hand, either by e-check or actual paper check. I just feel like I have a better handle on the monthly utilities and whatnot if I sit down and pay them by hand.

    I also typically don’t charge things like medical bills that come in the mail. I suppose I should, but I feel weird about that. I just write the check.

  18. full.tang.halo says:

    There are a few exceptions to my everything on a CC rule…
    1) Small local shops for lower dollar amounts, I try to pay for cash on everything up to about 30 bucks because I know how much the CC processing fee can kill them and “sticking up for the local business” while hitting them for a CC fee is backhanded help at the very least.

    2) Tipping while eating out, if at all possible you should always tip in cash, and if it is a place you frequent often you will become well know, and liked by the wait staff, as long as your not an asshat in general.

  19. gacompguy says:

    @krunk4ever:

    1. Interest free loan for 20 to 30 days? Well, if you have cash, why do you need a loan in the first place? BTW… don’t forget to pay your bill or that “free” loan can cost you upwards of 30%.
    2. Cash back rewards are just a way to suck you into getting the credit card in the first place. If you pay any interest on your charges, they are making their money back (and then some).
    3. Pay with a Visa/Mastercard debit card and you get the same buyer protection as a credit card.
    4. Save the money you would have paid in interest and just replace the item that breaks. I know tons of people that use credit cards to “insure” large purchases. All they have is a mound of debt… I have paid for appliances/computers/etc.
    5. Protection against fraud is also extended to Visa/Mastercard debit cards.

    Let’s see… don’t buy stuff you can’t afford, pay up front… don’t use credit, and have an emergency fund. It is rather simple. People didn’t use/need/want credit 50 years ago… why are we so insistant on having it now?

  20. savvy999 says:

    @benh57: Ask for an increase to your credit limit on your cards so that your average monthly spend is less than half your limit. I used to have the same problem- got dinged on my credit report for the same reason you did. Which actually didn’t make sense, since I haven’t carried a balance in CC at least a decade…

    Anyways, I only use two cards, one of which has a ridiculously high limit ($25k), the other was kinda low (only $4k) which I was running into regularly, so I asked and received a bump in my limit up to about $10k. Didn’t spend any more on either card, still pay them off in full monthly, but the balance:limit ratio was more in my favor.

    Checked back on my report a year later, that ding was gone. Don’t ask for limit increases too often, that can hurt you also; no more than annually, if that.

  21. mrosedal says:

    I use my credit card for almost everything. The rewards are the main reason. If you pay in full every month than the rewards are free money. It adds up fast if you pay your entire monthly expense on it. My personal favorite is Discover they are the best about leaving me alone, when it comes to phone calls, and they have some of the best and easiest rewards. I am currently enjoying 6 different lobster tails from around the world. It should have cost me $207, but I cashed in $100 of my discover card cash back, and the company doubled that. So in the end I only paid $7 for my 6 lobster tails.

    The biggest point is to pay in full every month. If you let a couple of months go buy than your cash back won’t be free money anymore.

  22. GreatMoose says:

    That’s exactly how my wife and I USED to use our credit cards. We’d pay it off every month, never carried a balance. One day we changed to paying cash for darn near everything, and we found something interesting: We spend FAR less money if we pay cash for something. We’re far more aware of where our money goes. We still use the card for fixed expenses like gas and the electric bill, but it’s nice because the costs on the card are now fixed, so the bill is pretty much the same every month. Just my testimonial. It’s worth exactly what you paid for it.

  23. Javert says:

    @gacompguy:
    1. It is like a loan. So if you have the case already, put it in the bank, earn interest, pay your card off at the end of the month and get rewards. I think this is referred to as win-win-win.

    2. Actually, most sophisticated consumers seek the cards with the best rewards but you are right about not paying it off each month…if you don’t pay it off, you should not be using CCs.

    3&5. The problem with using a debit/check card is the risk of fraud. I know that you will have protection from the card and not be held responsbile for the charges but for 2-5 days, your checking account will be at zero or greatly reduced leaving you with no money. That is too great a risk. Just use a normal credit card.

    4. But it seems that most people here are responsible about their usage and do pay off the card each month so why not get the extra protection and earn rewards.

    @CurbRunner: You are correct…if you are paying for drugs or escorts, don’t use the CC.

  24. Rusted says:

    It’s still nice not owing anything. Think I’ll just live without.

  25. gacompguy says:

    @Javert:

    1. Win-win? That is assuming that your card gets paid off every month before your balance carries and you get dinged with interest. Would you take out a loan at 5%-30% to make 2%-5% in a regular savings account knowing that you had to pay back your “loan” inside of 30 days? The effort alone isn’t worth it. My time is worth more than the few dollars a month I could be making off rewards.
    2. Hmmm… sophisticated consumers are in debt most of the time and use rewards as an excuse to have a credit card. If you pay it off each month, save extra effort each month and just pay cash. Then you don’t have to worry about the credit card company that jacks with you by upping your interest rate (say like Discover or Capital One recently?) or oops… not applying your payment on time.
    3/5. Most banks put the money back immediately. If they don’t, you need a new bank. If you have an Emergency Fund (instead of relying on credit cards), you wouldn’t be worried about having your account emptied out. Besides, why keep thousands of dollars in a checking account any way? You’re just asking for problems and not making anything on the money.
    4. The rewards and extra protections are just a way the credit card companies sucker people into getting their cards. I have a moral objection to doing business with a company that gets someone hooked and then jacks their interest rate upwards of 30%…. all so they could get 3% cash back and buyer protections. I know too many people that spend over half of their paychecks on debt. When I make a purchase, I pay cash… you would be surprised what kind of discounts you get when you flash crisp hundred-dollar bills. The money I save covers me if I need to replace the time a few years down the road. The item is paid for… I don’t have to pay for it again when MasterCharge or whoever sends their bill. Does that make me weird? You bet! I don’t have any debt.

  26. SadSam says:

    @GreatMoose:

    Me too, I used to use my cc for everything, pay it in full, take joy in my rewards. When I switched to using cash/debit for day to day expenses I found my spending was cut at least in half. I think its all psychological, somehow spending my own money makes me sad so I don’t do it. I’m not anti-credit but for me I spent way too much (yes I paid it off in full each month, but it was too much).

  27. wishlish says:

    I use my PayPal Mastercard that’s tied to my checking account. I get the benefits of the MC, and 1% cash back, with no debt!

  28. yg17 says:

    @gacompguy: If you have the self control, there’s absolutely nothing wrong with using a card for a loan, and it’s hardly any effort. I wanted Guitar Hero III on Sunday when it came out. I didn’t get paid until that Wednesday. So I put it on my card, and Wednesday, I paid it off. Took all of 2 extra minutes of my life, and I got a payday loan without any interest, I got to rock out a few days early, and I got to experience what it’s like being one of the idiots lined up at a Wal-Mart at 11:30 at night waiting for something to be released. And don’t forget the 100 points I racked up on my card. It’s a win-win. Well, maybe not for Chase, those bastards didn’t get any extra money from me.

  29. Robobot says:

    @full.tang.halo: Thank you for realizing how difficult it is for small businesses to handle credit cards. We’ve been thinking about accepting credit for a year or so now, but w’d lose money on almost all our sales unless we had a $10-$12 limit.

    I’m in college and I’m still scared to get a credit card. I don’t want to get financially ruined before I even graduate, but I know I need to get credit. The whole credit card thing is like a minefield.

  30. jpmoney says:

    I’ve been in the “use a credit card for everything” camp since college – why wouldn’t you be *if* you can pay it off every month. You also have to be able to keep a mental ledger in your head so you’re not overspending. Easier said than done.

    In regards to automatic bill pay, I can’t get myself in to that. I’ve seen friends get screwed over by student loan companies with multiple withdrawals, etc. If those companies can do it, anyone can. As others have said, recovering from such things is time-consuming and frustrating mostly because the person on the other end can’t figure out why the computer did that to you either.

    You can use your manual online bill pay as a sanity-check on your bills while doing a good job to check your balances regularly. If you can make it a habit you’ll be better off for it.

    Also, if you’re all credit cards and are going overseas, call the company ahead of time! They can flag your account and save you a lot of hassle with “suspect” charges.

  31. pretzelgreg says:

    @gacompguy

    you make valid points but I still take a more libertarian view of the whole CC industry and their “tactics”. As @javert noted, if a user has fiscal discipline and pays off the balance each month, then he/she is as debt free as you are with your cash only methodology. There are lots of temptations out there and I am no more going to demonize the credit card company for high interest rates than they should begrudge me for the hundreds of dollars in rewards ( I use a Upromise card that kicks the reward money into my kids 529b accounts ) that I get each year, without ever paying a penny of interest or fees.

  32. jpmoney says:

    @Quietly:

    I know you’re afraid of having a credit card, but you’ve got to get one in this day and age. Like many places will tell you – get one and only use it for a cd or something like that once a month and pay it off. I even like the one I read yesterday about putting it in a jar of water and sticking it in the freezer so you can’t get at it quickly. Don’t let your friends know about it and only buy half of what you can really afford.

    I’m 27 and have had a credit card since early college. My auto insurance took the predictable nose-dive at 25 because I had no accident claims. 6 Months later it jumped right back up. Why? “not enough credit history”. I’ve never missed a payment and pay off my cards every month. You’ve got to have a credit history these days to remove one more thing “they” can charge you for.

  33. barfoo says:

    @jpmoney (and others wary of automatic payments): some banks will let you specify a maximum amount for automatic payments, beyond which it won’t pay automatically. So I can it to pay my electric bill, up to about the average + 20%, and it will flag any excessive amount. This is the best of both worlds.

  34. Jasmo says:

    I think one good reason not to use your credit card for everything is that by doing so, you create a massive paper trail that describes in detail your physical movements and your spending habits. Which would be fine if you were in control of this information, but you are entrusting the control of this information to another party, one who’s entire reason for being is to make a profit. There is no reason to believe that this third party will not use your personal information to further it’s own goals – making profit. I’m sure this sounds a little paranoid, but I think in the end I’d prefer to keep my financial details and other personal details under my control.

  35. silvanx says:

    Using cash keeps me more aware of how much I’m spending than a little plastic card…

  36. Hoborg says:

    @full.tang.halo: This guy speaks the truth. CC’s are great and all, but it’s impractical to use them EVERYWHERE. Just carry a little bit of cash with you so you can use it when it makes sense. There’s not much point in trying to earn rewards on a popsicle.

  37. elf6c says:

    @tinyrobot:

    Excellent points. I use my Citibank Mastercard and Amex the same way.

    This also avoids- check washing scams, check hold/late payment scams and the like.

    Almost everything is paid on my two cards, which are then paid electronically from their own websites which credit my payment within hours.

    Rewards are cashed for gift cards which are used to offset planned purchases for the house (Target cards are especially great for this).

  38. AD8BC says:

    As much as I travel, I couldn’t live without my card. I actually have two — one corporate card (through work) which my expense reports (except mileage, per diem, and cash purchases) pay directly in to, and my personal American Airlines card (just converted from a Northwest Airlines card because I moved to Dallas). Since the inception of online account access, it is a cinch to monitor your purchases. I monitor all of my accounts every day, just for the sport of it. And my card gets paid back, on time, every month — I use the credit card website itself to electronically pay the card, and arrange for payment to post the day before it is due so there is no excuse for the card company to lose the payment and call it late.

  39. @Quietly: “I’m in college and I’m still scared to get a credit card. I don’t want to get financially ruined before I even graduate, but I know I need to get credit. The whole credit card thing is like a minefield.”

    Quietly, get a simple card with a low APR and low credit limit (don’t worry about rewards with your first card; go low APR in case you screw up) and use it JUST to buy books for the semester. You know you’ll have the money to pay it off, assuming you do get book money from somewhere, and then you can even order your books from half and amazon for cheaper than the bookstore :P. You won’t be using it for “everyday” purchases, just planned purchases. And even that little usage will help build a credit history.

  40. @Quietly: Oh, PS — you can send a check in for the amount you charged the day you charge it, if you want to. You don’t have to wait for the bill.

  41. doireallyneedausername says:

    The ones that suffer the most when everyone uses their credit card to pay for things are small business owners. AMEX charges over 2% + transaction fee for every card-swipe transaction! Big-box retailers, like Wal-Mart have processing discount agreements given the volume of credit card transactions they conduct everyday. Eventually, we will (and probably already have) suffer(ed) from increased prices on all products across-the-board, to compensate for this added cost of business.

  42. jamesdenver says:

    I use credit cards for travel, car rental, airfare, online purchases, and anything I think I could have a problem with.

    A pay online via my checking account – so as soon as the posting hits I pay it. Sometimes I make 2-3 payments every two weeks, but I like having the post hit my credit card, and pay it asap.

  43. doireallyneedausername says:

    @Eyebrows McGee:

    Don’t get a credit card from a table on campus and never sign up for a card just for the sign-up bonus. Do your research at bankrate.com to find the lowest rate cards. Don’t carry a balance on the card. Follow all these steps, plus throw in a sprinkle of common sense, and you’ll be on your way to building your credit.

  44. johnva says:

    @GreatMoose:

    This may be a problem for some people, but the problem isn’t really the credit card. The problem is not having a disciplined method for tracking and budgeting expenses. Using cash is kind of like “enforced discipline”. Other people don’t need it. Personally, I spend less putting everything on credit cards because it’s easier for me to track where all my money is going continually via accounting software. Then I can tell exactly when I’m overspending on a certain category and cut back. With cash I tend to neglect to record what exactly I’m spending every penny on.

  45. @doireallyneedausername: Oh, goodness me, no. No campus tables! Find one with a low APR, fair terms, and a notable lack of sexiness. Go safe and dull for your first card!

  46. Voyou_Charmant says:

    I didn’t even bother reading the whole article, but why not just use your bank card that has a credit logo? Even better if you use Charles Schwab or HSBC high interest checking, then you actually make money.

    I have found that all of my CC online accounts are poorly organized and far more difficult to navigate/use than either my Schwab or BOA online banking.

  47. anatak says:

    @Javert: “…so why not…”?

    Why not? Because of what is being ignored – RISK. You’ve signed your financial life away to a big company full of employees who get payed to come in every day and find sneaky little ways to rip you off. It didn’t begin with Universal Default and it won’t end there. They control the game in every way, shape and form. These are companies who make the biggest bucks from the people who are behind and they are doing all they can to put you into that category.

    @Quietly: No, you’ve been misinformed. You actually don’t need credit. You are right to be leery of credit as something like 11% of bankruptcy filers are kids graduating college. Learn about credit before jumping head first into it like so many others suggest. PBS’s Frontline had a great documentary about credit cards and the secret life there of. Maxed Out is a good and more recent documentary on the subject. And Dave Ramsey is always willing to tell you all about the scum you are considering doing business with.

  48. Mr. Gunn says:

    Anatak, you advice here applies to people who can’t manage their finances and keep on top of those things, but it otherwise OK.

    However, your statement that you don’t need credit is dangerously false. Everyone needs it, unfortunately, unless you expect to pay for a house or a car with a briefcase full of hundreds, and you’ll still be behind those who are utilizing the rewards to get a return on spending money they would have spent anyways.

  49. jimconsumer says:

    @Quietly: You said, “but I know I need to get credit.” The reality is no, you do NOT need to get credit. That is a complete myth.

    Think: Why do you need a credit score? So you can go into debt. Why do you want to go into debt? You don’t. Ergo, you do not need a credit score. Pay cash for everything and it will never be an issue.

    “But”, you say, “I want to buy a house some day and can’t pay cash.” Well, the first answer is you CAN pay cash if you live extremely frugally and bust your balls for a few years. The second answer, however, is that you do NOT need a credit score to get a mortgage. Just find a lender who will do manual underwriting. Most will, just explain that you do not used credit, you pay for everything in cash and you don’t have a credit score. This process involves a little more work – checking bank statements, getting a reference from your landlord showing you’ve paid your rent on time every month – but it’s really no big deal.

    Cell phones? You have to pre-pay a $500 deposit usually, but you can get a cell phone without credit.

    Insurance? If they want to charge you more, tell them, “You people are idiots. I pay everything with cash and have no debt, thus no credit. This proves I am fiscally responsible and your own studies have shown that fiscally responsible people are more responsible drivers. In fact, because I have no debt and never have, I am more fiscally responsible than the rest of your clients. So you either give me your best rate or I’ll take my business elsewhere.” & if they don’t, go elsewhere.

    So, my suggestion: Don’t worry about getting credit. You don’t want it. You don’t need it.

  50. selectman says:

    @gacompguy:
    You obviously missed krunk4ever’s point that many CC users are actually RESPONSIBLE and *gasp* pay on time and in full every month.

    1. No one said they needed a loan. We (the responsible ones) just take advantage of it to earn, to be fair, a negligible amount of interest.
    2. Irrelevant unless you prove that having a CC does us harm.
    3. Not true – your money is gone the second it clears. With a CC you have a month to fight it before there is a potential to front the disputed amount.
    4. Who said anything about paying interest? As far as savings, I take my reward check and put it straight in my savings account.
    5. Irrelevant.

    Finally, nice straw man argument – the sheer existence of the human race 50 years ago invalidates anything invented since then?

  51. jamesdenver says:

    @jimconsumer:

    Of course you don’t NEED credit or a credit card but I’m as frugal as they come and have plenty of savings. BUT:

    I like to travel. I’m not paying cash for plane tickets for obvious reasons.

    I have a backup when traveling overseas if I should lose my wallet or shoebox full of Euros.

    I share a car with my other half, hence I rent one occasionally.

    I buy stuff online. When “Kewlshirts4U” screws me over I don’t have to pay.

    I can instantly send my mom flowers from a local florist in her hometown.

    Oh yeah and I get lots and lots of miles.

  52. gacompguy says:

    @selectman:
    No, I don’t believe that I missed krunk4ever’s point, I just don’t agree with it. Do you think that the credit card companies would be in business if they weren’t making money? They aren’t in this just to loan you money for a few weeks and give out free rewards; they are in it for the 5% to 30% they hit you for if you carry a balance.

    Look who is making a straw man argument! Debt and credit cards aren’t something that have come about in the last fifty years. I was making the point that in the 50′s, no one would have thought twice about going into debt for something like gas, groceries, video games (if they existed), or anything else…. debt was BAD back then. We’ve been brainwashed by these credit companies into thinking it is a good thing.

  53. FLConsumer says:

    Add me to the list of people who pays for everything (or as much as possible) with credit cards. If the electric company here didn’t charge another $5 to process credit card transactions, I’d pay that one on there too. (Currently disputing this one with Visa). HOWEVER, the only automatic payments I do are ones I initiate FROM my bank. I refuse to give someone permission to automatically bill me, especially my checking accounts. They can send me a bill and I’ll pay them. I pay bills as I get them in the mail, either doing an online BillPay through my bank or on my credit card. At the end of the month, I’ve got a very nice paper trail and am able to expense out the items which are reimbursable and having my nearly-complete spending in Quicken shows me exactly where I’m spending money and where I’m foolishly pissing away money. Combine that with the near-realtime transactions list for the cards online and it’s pretty difficult to go over-budget. If anything, I spend far less with the cards than I do cash.

    @gacompguy: Who doesn’t pay off their credit cards in full each month? There’s no way in hell I’d pay the 8%-12% interest the card co’s want for daily crap. If you’re risking not being able to pay the bill at the end of the month, then you shouldn’t be spending it, period. Even if that does mean food. There’s always ramen and it’s kept countless college students alive during times of financial hardship after they spent too much on ethanol for the semester.

    I refuse to have any debit cards, with one big reason being that the fraud protection with debit cards IS NOT the same as it is for credit cards. Visa’s terms of service make this pretty clear.

    Also, I’ve yet to see any debit card which offers the higher cash/point back values, personalized services (concierge, travel), extended warranty, and product theft protection as credit cards.

  54. FLConsumer says:

    @selectman: Your #4 is actually incorrect. If you have a transaction to dispute, you are responsible for your bill MINUS that transaction until its validity is proven. Despite this being an online society, the credit card rules still work in terms of billing cycles. Not sure how each credit card’s terms of service affect this, but I know my agreements say that there will be no interest assessed on the disputed transaction while it is in dispute. Once they’ve posted it to the bill, I’m then responsible to pay for it at the next billing cycle.

    @gacompguy: Who thinks going into debt for anything now is a good idea? I don’t know of anyone, including the CCs who’ve advocated going into debt for something you can’t afford to pay off immediately. The “past 50 years” arguement doesn’t hold much water. People have been loaning money and borrowing money since pre-biblical times. Now we’ve just centralized it.

    @jimconsumer: Can’t buy an iPhone with cash. :P Not that anyone would actually want one when crippled with AT&T, but still…something you can’t do without credit. Ever try renting a card with cash? Isn’t likely going to happen either. Business dinner? Are you really going to be carrying $400-$1,800 cash in your wallet? If so, are you in the NYC area? Where do you live? And about what time in the morning or evening do you leave your house. Me and a few ..ahem..friends, would like to “meet” you to “discuss” money. We look forward to taking your mone…er, advice.

  55. Meinhut says:

    I use only two cards…Amazon Visa and the new eBay Mastercard (Sam’s only takes Mastercard). All give points. I carry an American Express and Discover card as well, but only use them if I run into some backwoods outfit that isn’t savvy enough to take MC & Visa. Just pay everything off every month and go shopping on Amazon.

  56. FLConsumer says:

    @Meinhut: Just curious, where do places take Amex /Discover but not Visa/MC? In Florida it’s Visa/MC accepted everywhere, Amex/Discover rarely. Sam’s being the exception which only takes Discover and recently started taking Mastercard.

  57. ShadowFalls says:

    @FLConsumer:

    Being in Florida myself, with Racetrac and Sam’s Club being the odd exceptions, pretty much any medium-sized or larger business accepts everything. I have only seen a handful of places take just Visa and Mastercard.

    For all those that think cash, checks, and debit cards are a good idea, they are not. Cash can be lost and stolen, when it is, it is gone. Checks are pretty much completely insecure, only use a check if you sincerely trust a person. Debit cards are linked to your bank account. There can be difficulties when these are stolen and used, not to mention fees such as overdrafts, etc.

    @yg17:

    I use if for mostly Amazon purchases myself. If you want that Volkswagon card, you will have to apply for a new one. Most banks will not transfer cards while deactivating the old one. You would need to apply for it and close the old one, a negative effect on your credit twice.

    The only exception I have seen is Target, whereas if you have the regular Target card, they can upgrade it to the Target Visa card and the other is automatically deactivated without a cancellation. This is Target Bank naturally, they only offer their own card.

  58. mst3kzz says:

    @randombob: That makes sense for CC bills which fluctuate, but car insurance doesn’t really change that often and when it does you get a premium notice in the mail, so it’s not like you wouldn’t know about it. I think auto payments are great for expenses that are static (mortgage, car payment, auto ins, etc.)

  59. evixir says:

    CC’s for travel and major purchases, some online stuff, and not much else. I use my debit card for the rest and cash for lots. I don’t particularly cotton to all of my purchases being tracked by some huge conglomerate.

    @greatmoose, @curbrunner and @full.tang.halo … I’m in your camp.

  60. nardo218 says:

    I do, except for the automatic payments. (I have trust issues.) I treat my CC like 80s scifi “credits” – automated money is the way to go. I never use my execrable math skills to balance my own checkbook, because I never write checks. Let the computers add the numbers.

    (It prolly helps that I bank at a credit union; they’ve never done anything evil to me.)