PDA

View Full Version : Credit Cards


Mizan de la Plume Kuro
July 28th, 2011, 07:19 PM
They serve a purpose, no doubt, and they have their benefits. However, do these benefits outweigh any problems they may cause? Also, if you want to get technical, I'm specifically referring to revolving credit because that's the problematic one.

I'm not willing to just say 'discuss' because it sounds a bit callous and pretentious, but I'll say it anyway.

Discuss.
God, I hate saying that.

G.U.Y.
July 28th, 2011, 07:25 PM
Credit cards are amazing if you're not stupid. Just don't overspend and buy stupid crap.

I have one, I use them for gas when I haven't been payed yet basically - then I pay it off when I do.

2Cool4Mewtwo
July 28th, 2011, 07:45 PM
I have a credit card but it's not really anything atm since I have a joined account. I'd have to wait about 5 months before I can get my own :(

And I agree with Landorus - If you're not mature enough to understand how credit cards work, then simply don't use it.

Kyoko
July 28th, 2011, 08:14 PM
I'm just sticking to debit right now since my funds aren't that big and I don't use it too much anyway. I'll eventually get a credit card, once I have a little more money coming in regularly so I can make sure I DO have the money to pay the purchase back.

I find it ridiculous when people sign up for credit cards and use them when they know full well that they don't have the means to pay the money back. It screws people over so much more than they initially think. A lot of people check your credit score.

I think the cons outweigh the pros, unless you know how to responsibly manage your money.

Black Ice
July 28th, 2011, 08:21 PM
If people didn't buy things they couldn't pay off, it wouldn't be a problem at all.

Then you'll have zero downsides to a credit card.

Archer
July 28th, 2011, 08:32 PM
I think the cons outweigh the pros, unless you know how to responsibly manage your money.
Most people signing up SHOULD be able to manage money properly. I have a Debit Mastercard, so I can use it the same as a credit card (buying online, tap-and-go shops), but it draws the money straight out. I leave a buffer, so I'm not going to need to overdraw. So there's no point for me.

pokecole
July 28th, 2011, 08:38 PM
Personally I agree that the cons outweigh the pros, and some ignorant people go and make the decision that since they're not directly using their money, they can buy whatever they want. But if you know its not some sort of "unlimited money" and use it right then it can be for the best.

Guy
July 29th, 2011, 03:57 AM
My policy on credit cards is simple. Don't get one, and you don't get any credit or debt issues.

Honestly though, credit cards are fine if you know how to spend your money wisely and you don't spend what you don't have. For me personally though, I rather stay clear of them.

Overlord Drakow
July 29th, 2011, 04:10 AM
I have two credit cards because I'm such a baws but I only really use one. As long as you are in control of your cash flow, credit cards are really good. I use mine when I'm booking hotels, buying expensive stuff or when I buy online - because if a problem arises with the transaction, it's the responsibility of the credit card company to try and rectify the problem or offer compensation.

Oryx
July 29th, 2011, 04:20 AM
Having no credit is often seen as being as bad as having bad credit. The most financially responsible thing to do with a credit card is to buy something semi-large (not using up too much of your limit) and pay your minimum monthly payment until it's paid off. That gives you good credit for paying on time regularly. Credit scores like when you use credit cards regularly and always do payments on time, and that's what I intend to do once I'm living on my own with a full-time job, to make sure that my credit score is high enough.

Of course, that's assuming you're responsible. If you're not, that credit card can easily be your downfall.

Guy
July 29th, 2011, 04:39 AM
Having no credit is often seen as being as bad as having bad credit.
Wanting to add onto this. This is very true, because with no credit score, banks often don't know if they should lend you a loan or not, given they have no history of your credit records. However, there's more than one way to building your credit score even without having a credit card in your possession.

Mizan de la Plume Kuro
July 29th, 2011, 08:18 AM
My policy on credit cards is simple. Don't get one, and you don't get any credit or debt issues. Problem is, people do get credit cards and they do overspend. The worst part being that credit cards themselves increase the tendency for a person to overspend due to the fact that money isn't really tangible when all you're seeing is numbers on a screen. Plus, because they're credit cards, you don't even have to have the money, so you're free to spend until you reach your credit limit. Most people don't even pay the full amount in one month, and so your debt increases because of the imposed interest rate.

Generally speaking, we all know that a significant majority of people in the world don't think too far ahead *motions to various environmental/socio-economic problems*, so why should we even have credit cards to begin with?

Guy
July 29th, 2011, 11:54 AM
Problem is, people do get credit cards and they do overspend. The worst part being that credit cards themselves increase the tendency for a person to overspend due to the fact that money isn't really tangible when all you're seeing is numbers on a screen. Plus, because they're credit cards, you don't even have to have the money, so you're free to spend until you reach your credit limit. Most people don't even pay the full amount in one month, and so your debt increases because of the imposed interest rate.

Generally speaking, we all know that a significant majority of people in the world don't think too far ahead *motions to various environmental/socio-economic problems*, so why should we even have credit cards to begin with?
Well, I was generally speaking for myself when I said that. There's no stopping someone from getting a credit card if they wanted one. The responsibility is on them to be able to manage a budget and being able to pay it off.

Credit cards have their benefits though. I know ─ at least here ─ you can't rent a car without a credit card. Apparently they don't take debit cards (I don't know why, but that's just their policy). So, in this case you would need to have a credit card. Other benefits would include getting discounts in certain stores, traveling expense, and more. They can also come in handy in case of emergencies. A credit card can do wonders for someone so long as they know their limits.

Therefore, in the reality of it all, the problem isn't having a credit card. The real issue would be with the owner of said credit card. If they can't learn to handle having one or know they won't be able to keep up with the charges and interest, then the problems that come with it and the fault would be on them. That's the little snag with credit cards and that's how credit card companies earn their money.

Mizan de la Plume Kuro
July 29th, 2011, 01:02 PM
Credit cards have their benefits though. I know ─ at least here ─ you can't rent a car without a credit card. Apparently they don't take debit cards (I don't know why, but that's just their policy). So, in this case you would need to have a credit card. Other benefits would include getting discounts in certain stores, traveling expense, and more. They can also come in handy in case of emergencies.Renting came before credit cards and car rentals can probably survive without having to ask for credit cards. As for the rest, they're credit card promotion methods, not actual uses for credit cards. Emergencies? Debit cards could conceivably allow for a limited amount of credit, maybe £200/£300 a month, or less, for such cases.

A credit card can do wonders for someone so long as they know their limits.

Therefore, in the reality of it all, the problem isn't having a credit card. The real issue would be with the owner of said credit card. If they can't learn to handle having one or know they won't be able to keep up with the charges and interest, then the problems that come with it and the fault would be on them. That's the little snag with credit cards and that's how credit card companies earn their money.This was where I was heading. You can't trust the majority of people to be logical and use credit cards responsibly, so why have them in the first place? They create debt and they encourage wasteful spending. Profiting off of human nature seems a bit amoral to me.

And I guess the only reason I made this thread was to see if anyone could justify why they should exist. I certainly don't see the logic here.

Cherrim
July 29th, 2011, 02:34 PM
I love my credit card and it's safer than my debit card so I use it a lot more. (And it can also be used in a lot more places--some stores or restaurants here still don't accept debit!) I think they're almost imperative to have when you're out and about in the world. I got mine a few years ago (I think it expires next year) and I always make sure to pay off my full balance as soon as I get the bill so I don't incur any interest. I also never use my credit card to buy anything more expensive than the amount in my bank account.

The only real problem with credit cards is that people don't know how to be responsible with their money--and that's partially just a problem with them, not the credit companies. Maybe they don't understand how credit cards work and basically see them as free money, or maybe they don't realize the importance of paying off their debt quickly. :( I realize sometimes things happen and you just have no choice but I've heard of people charging trips, new electronics, and all sorts of other frivolties to their credit cards and then wondering a decade later why they're always so broke with debt collectors stomping down their door.

It doesn't help that I know for a fact that some banks will simply pre-approve you for a credit card before you even turn 18! One of my friends said he didn't even have to apply for his credit card when he got it, whereas I had to go to a different bank to open an account with them to get one since my default bank didn't approve my application because I had no previous credit. :/ That any bank can do that for a student just breaking away from their parents and heading off to college and the real world--before they might even know about handling their own finances--baffles me and probably explains a lot of the personal debt in this world. Maybe if banks were only allowed to give out credit cards with very low spending limits (like $200-500 a month [I had to ask to be bumped up to $1000 on mine from the default $500]) for first-time card owners, things might be a little different?