The value of Credit Cards

[OnTheRebound]

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@Anonymous wrote:

Its a subjective question with no right or wrong question. Credit Cards are a tool and its up to each person to decide how to use them.

Obviously, the more you make the easier it is to save money and put it aside...or at least the amount you can afford to save.

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I will also add, the less DEBT you have the more you can save.

After all, you can make a million a month but if you are in debt up to your eyeballs you are not going to save a plug nickel.

[marty56]

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@MidnightVoice wrote:

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@marty56 wrote:

Last June my AC unit died which cost me 7500.  I did not have an emegency fund so I was forced to use credit.  I was able to get a 0% loan for 12 months which helped financialy but it was still the wrong answer.

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Although I believe in emergency funds I would take 0% credit for 12 months over using my emergency fund anyday!

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Altough I will PIF 2 months early, it still remember the bad old days when I had several 0% loans that I did not PIF by the term date.  You are 100% correct in using other people's money for free though.

[MidnightVoice]

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@marty56 wrote:

Altough I will PIF 2 months early, it still remember the bad old days when I had several 0% loans that I did not PIF by the term date.  You are 100% correct in using other people's money for free though.

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You are not the only one.  I get nervous and pay early and make sure I don't get hit!!

[scottwagnon]

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marty56 wrote:

Last June my AC unit died which cost me 7500.  I did not have an emegency fund so I was forced to use credit.  I was able to get a 0% loan for 12 months which helped financialy but it was still the wrong answer. 

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why was this a bad decision? did you take the loan knowing you would likely be able to pay it off before the end of the 12 months, and did you pay it off in the 12 month period?

[Anonymous]

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@scottwagnon wrote:

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@marty56 wrote:

Last June my AC unit died which cost me 7500.  I did not have an emegency fund so I was forced to use credit.  I was able to get a 0% loan for 12 months which helped financialy but it was still the wrong answer. 

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why was this a bad decision? did you take the loan knowing you would likely be able to pay it off before the end of the 12 months, and did you pay it off in the 12 month period?

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It was a bad decision in that any time you take out a O% interest loan you run the risk, albeit slight, of not complying with the terms and ending up paying through the nose.  Banks do not grant 0% terms because they are nice people and want to help you; they know that a significant percentage of customers will mess up and then get hit with a lot of interest.

It kind of reminds me of share-secured loans at credit unions.  I was talking with someone in management at one of our favorite conservative credit unions about why they even report secured loans to the credit bureaus.  My theory was that why would it be considered as pertaining to credit history when you are only borrowing your own money.  I mean, who would not pay themselves back?  He stated that you'd be surprised at how many people mess up even with share-secured loans. 

[Anonymous]

Credit cards provide a sense of security to me. I recall being glad that they helped people get through the economic downturn and/or job loss. And I'm totally into the rewards!