The PIF Phenomena ;)

[Anonymous]

Okay so something I have always found quite intriguing/odd/hysterical on these boards are people constantly telling others to "always PIF" on their cards each month.  Now, while admitedly I have a good income and do PIF many of my cards monthly, I defintiely carry balances too - sometimes large ones.  Being back in school for my Masters, esepcially now...

Now of course IDEALLY one would want to PIF always, but most Americans rely on credit cards to get by in life -- even those who make well over 6 figures.  Debt is sadly, a part of life for many -- Ive always found it ridiculous that banks extend all this credit but dont want you to really use it, then AA you for using too much of the line THEY GAVE YOU!!!    This rant mainly stems from an AA Thread regarding BOA I just read here moments ago -- it boils my blood pressure to see that crap (speaking ONLY in terms of AA for "high util", not baddies, lates, CO etc).   Nonsensical.  Bottom line:  Not everyone can afford to PIF at all times, and CC companies should expect that -- I think the average US credit card debt is at least $15-20k ... and thats the AVERAGE, meaning some are wayyyy above this #.  

I'm not saying it's a good idea to get into debt or carry balances, but it happens, for many different reasons -- I feel like these boards are either filled with all ridiculousy loaded people who can always PIF, or many of them simply charge very little amounts.  Now me, I have a rent payment, auto loan, major schooling costs, helping family, pets to care for, and basic life expenses, so I cant always throw all of my income at CC debt (nor would I even if I could lol)....I guess being a nurse I do not view debt the same way many do, especially here -- I know it can all be over tomorrow, so the last thing I spend my days worrying about are my CC debts (as long as no payments are missed, of course) -- it just isn't worth it to me.   Just some food for thought -- not sure who will agree, but I do find the constant advice of "always PIF" to be idyllic, but not very plausible for most people.  AND, I think the AA seems to overblown for the reason of high UTIL at least -- anyone else ?  

Basically this thread is a validation that I'm not the only one in the country (or on these boards) who will carry balances somewhat often, at least at this young stage in my life.  :-)

[redpat]

The reason most have credit card debt is 1) buy crap they can't afford 2) have a lifestyle they can't afford 3) lose a job 4) get sick or 5) get divorced.  There maybe more.

Life happens.  Hey, I'm one that PIF, I do save for large purchases and charge them and yes my income is up there.

[kdm31091]

I don't think PIF is "idyllic" or "implausible". Emergencies happen and of course, CC debt can be run up because of that. But that doesn't mean that is always (or even often) the best option. Ideally, you have an emergency fund vs charging up debt at 15 or 25% APR.

The reason PIF is so stated on here is that everyone is very focused on rewards, and rewards mean zilch, zero, nada if you don't PIF. Some people like to argue about it for some reason, but if you are paying 22% interest, 2% cashback is wiped out and you would have been better off paying cash or debit and saving the interest.

If you routinely "cannot afford" to PIF outside of an emergency, than you are living beyond your means. Simple as that. Cut some expenses. Don't chase after rewards as a reason to overspend. If you can't PIF, there's not much point in using credit cards to begin with. You are losing far more than you're gaining.

[Anonymous]

Completely agree that 1 & 2 is nonsense and dumb -- but 3, 4 and 5 you listed are usually unavoidable, hence where credit comes into play.  Personally, I charge rent (live in a high end luxury complex - big corp and online payments) to get the rewards reaped and cash back (Rent: $2,000 monthly, amounts to about $40 back a month; also charge auto payment (same reason - rewards), groceries, gas (PenFed 5% BACK!!!!), and utilities.  Out of those, I usually PIF all but 1-2 of those charges, and even that I pay down decently.  Some month I will skip charging rent, but rarely -- why pay $2000 in rent when you can pay $1960 ??  Ill never understand people who tell people "never to use credit cards" but that's a whole other thread!

[Anonymous]

kdm -- very true with the exception of 0% APR cards for a year, or very low interest cards for cash rewards especially

[Anonymous]

I have a "low" income and have paid in full pretty much until recently. I have ran into a few problems and now have debt. I know how amazing a credit card can be to cushion someone. I would've been SOL A couple of times without my credit cards. Now I will need a couple months to get my cards paid off. I on the other hand am pretty stressed out about the thought of debt.

I do believe you are correct about the banks AA for reasons that they gave you the opportunity to have like cash advances, high utilization. I understand their thinking although the irony is undeniable. If you don't have CO, late payments, I think it's stupid. AA before you've actually done anything wrong. :-(

[Anonymous]

I carry small balances at 0%. I can afford to PIF.

I think the Approvals section (and seeing new cards in others' signatures) can encourage some irrational behavior. It's pretty common to see someone talk about getting a new CSP or Ritz one month and then talk about carrying a balance on the card a few months later.

[Berk]

I PIF every month. I don't make 6 figures either. I live within my means. I have a mortgage, RV payment, home improvement loan payment, and all the expenses that come with home ownership. I save money and I have a retirement fund. I put just about anything and everything I can on credit cards and then pay the balance due every month. It works for me. I realize that it doesn't work for everyone though. Trying to live "the American Dream" is about impossible in this day and age. I have seen people though who live paycheck to paycheck only because they have to have the latest and greatest for them and their kids. That is their decision though. 

Credit card debt is so high in this country because, as a general rule, people spend more than they have. Not a wise decision in my opinion. If that is how you have decided to live the majority of your life that is your business. Yes, there are times when it can't be helped but 15-20K CC debt on average in the US shows that lots of debt is a lifestyle choice for the majority.

I choose to PIF, I have no debt other than the loans mentioned above. my newest appliance is my 5 year old fridge - $800. My washing machine is a top load generic GE that cost me $350. My stove is 18 yrs old, My dryer is 20 years old. My truck is 21 years old. I don't like debt so I try to eliminate it wherever and whenever I can. That is a lifestyle choice that I made.

It is your money. Spend it however you want to. It is really no one else's business what you do with it. But, don't get upset with lenders if they are concerned by what you might do with their money. It is their money. They can do with it what they want. You have no claim to it at all. That is why we have credit card statements - the people who loanded us their money want it back and if they sense that you may be irrisponsible with what is theirs, they might take all or some of it back. 

[kdm31091]

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@Anonymous wrote:

I carry small balances at 0%. I can afford to PIF.

I think the Approvals section (and seeing new cards in others' signatures) can encourage some irrational behavior. It's pretty common to see someone talk about getting a new CSP or Ritz one month and then talk about carrying a balance on the card a few months later.

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Sure, 0% makes sense. That's what the offers are for.

But if one is charging their everyday spending and paying interest on CCs, at 11 or 15 or 18%+, there is no way the rewards outweigh that, and that person should consider using debit/cash if they cannot control spending. I do think people get caught up in chasing new cards/rewards and unfortunately some get in over their heads.

I also see a lot of people go on app sprees and then post a month or two later about needing a BT or 0% etc.

[redpat]

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@Anonymous wrote:

kdm -- very true with the exception of 0% APR cards for a year, or very low interest cards for cash rewards especially

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I still PIF my EDP even though I have 0%.  I did the same with Discover.  Cash is dead money anyway, lol.

If I can't afford it, I shouldn't buy it.  Our society has to stop thinking about instant gratification and I have to have it now.

These forums are a prime example of over indulgence with credit cards, it makes for great entertainment at times, but god how many or how much does one need.