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Why Do Some People Dread CC?

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Gunnar419
Valued Contributor

Re: Why Do Some People Dread CC?


@Anonymous wrote:

They've never owned a credit card in their entire life. One guy had to pull his entire history of receipts to prove his credit wortiness for a house loan. These people are so naive and say something similar to, "The richest person next to Bill Gates doesn't use credit cards! They build wealth over time!" I'd say, okay, but you're not even a millionaire and you're talking about billionaires? You are a common everyday person. Get real.

 

What's your opinion on their perspective?


I live in a rural area with high unemployment and high poverty. Some of the smaller businesses in the area don't take ccs. It appears to me through observation that the older and more prosperous segments of the population use ccs a lot, while the younger, poorer, and more drug-involved segments do not. We also have a lot of people here who work in the underground economy and they do cash business to keep a low profile or perhaps because they're not very good money managers (nobody is getting rich in these underground endeavors, which mostly involve mowing lawns and doing construction). Many of them do not understand and do not trust credit, or they don't trust themselves with credit.

 

I understand their perspective and have nothing against it. To each his/her own.

Message 31 of 36
EdMan63
Established Contributor

Re: Why Do Some People Dread CC?

There are many reason why people can fear credit cards. I used to fear them myself. I got into credit trouble early in life, beliveing you have extra money. Those minimum payment seem small at first. I distinctly remember applying for my first Visa and being heartbroken when I was denied. From that point on I had a fear of being rejected. Once I got a Visa from my CU, I lived with that and a debit card for many, many years. I learned to live on minimal credit but it does get tricky if you travel as many hotels block a huge amount if you use a debit cards and rental cars as well. I still only have a few CC but understand their value when it comes to building credit and scores. I don't want to have to micro manage my life to the level that numerous cards would demand. Needing spreadsheets to keep up with rewards. No way. I believe in keeping things simple. Quality vs quantity.  I think many people feel that way.


Message 32 of 36
Anonymous
Not applicable

Re: Why Do Some People Dread CC?

Lots of good points in here. My thoughts:

1. Credit cards don't offer true advantages over cash. They are simply alternate methods of payments. Most of us use credit cards for rewards and to boost our credit score. Lots of people who dread CC's don't know or care about the rewards and don't view improving their credit score as important.

2. It is far easier to get in trouble with credit than with cash. With 1,000 dollars cash I can't spend more than 1,000. With my credit cards I have close to 100,000 dollars of potential for spending. This is far more dangerous for the vast majority of people than cash is. How many stories have you heard of people who made mistakes with credit cards and got into huge debt? We all know people. That trouble is minimized by not having the power to spend a lot of money that isn't "there."
Message 33 of 36
longtimelurker
Epic Contributor

Re: Why Do Some People Dread CC?


@Anonymous wrote:
Lots of good points in here. My thoughts:

1. Credit cards don't offer true advantages over cash. They are simply alternate methods of payments. Most of us use credit cards for rewards and to boost our credit score. Lots of people who dread CC's don't know or care about the rewards and don't view improving their credit score as important.

2. It is far easier to get in trouble with credit than with cash. With 1,000 dollars cash I can't spend more than 1,000. With my credit cards I have close to 100,000 dollars of potential for spending. This is far more dangerous for the vast majority of people than cash is. How many stories have you heard of people who made mistakes with credit cards and got into huge debt? We all know people. That trouble is minimized by not having the power to spend a lot of money that isn't "there."

Well, it does offer *some* advantages over cash, apart from rewards (which for many really aren't important): if it is stolen or lost it is not "gone" in the way cash would be, and it also offers increased consumer protections for some purchases.     On the downside, it is much more trackable, and for those involved in cash-only economy, you really don't want that.

 

Whether the advantages out-do the potential dangers is a decision each person needs to make.     Choosing to get and use credit cards isn't always the right choice, despite the overwhelming sentiment here  (which surpirses me as there are a lot of rebuilders who have got into trouble in the past.  Perhaps the self-selection here is for those that made it back, whereas a lot don't)

Message 34 of 36
Anonymous
Not applicable

Re: Why Do Some People Dread CC?


@longtimelurker wrote:

@Anonymous wrote:
Lots of good points in here. My thoughts:

1. Credit cards don't offer true advantages over cash. They are simply alternate methods of payments. Most of us use credit cards for rewards and to boost our credit score. Lots of people who dread CC's don't know or care about the rewards and don't view improving their credit score as important.

2. It is far easier to get in trouble with credit than with cash. With 1,000 dollars cash I can't spend more than 1,000. With my credit cards I have close to 100,000 dollars of potential for spending. This is far more dangerous for the vast majority of people than cash is. How many stories have you heard of people who made mistakes with credit cards and got into huge debt? We all know people. That trouble is minimized by not having the power to spend a lot of money that isn't "there."

Well, it does offer *some* advantages over cash, apart from rewards (which for many really aren't important): if it is stolen or lost it is not "gone" in the way cash would be, and it also offers increased consumer protections for some purchases.     On the downside, it is much more trackable, and for those involved in cash-only economy, you really don't want that.

 

Whether the advantages out-do the potential dangers is a decision each person needs to make.     Choosing to get and use credit cards isn't always the right choice, despite the overwhelming sentiment here  (which surpirses me as there are a lot of rebuilders who have got into trouble in the past.  Perhaps the self-selection here is for those that made it back, whereas a lot don't)


I was taking it from the perspective of people who "dread" CC's.  I don't think most people know about rewards or the protections that CC's can offer.  Financial literacy is extremely low.  People who are afraid of CC's have heard horror stories or know someone who has been in big trouble.  They don't see any potential advantage of owning a CC. 

Message 35 of 36
Anonymous
Not applicable

Re: Why Do Some People Dread CC?

There is a lot of crossover for the people who dread debit cards that is for good reason.  If your bank account gets drained it's drained if someone runs up the credit card,  you'll get a phone call you might lose your credit limit while they fix it,  but you didn't lose your money.  that is kind of a different thinking vs just hiding stuff under your mattress. 

 

Obviously the advice for anyone who uses a debit card and knows how to work it and goes online to check on things should just get a credit card

Message 36 of 36
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