You need it for the rewards LOL
@egaithe wrote:But why would you have credit (carrying a loan) just to pay it in full? That means you don't need it....just like those rollover minutes with AT&T (Cingular Wireless).
Several reasons (others, please feel free to add to the list):
1) Establishing a responsible overall financial plan and strategy. Occasionally carrying a balance is not an issue, but when people have the PIF mindset, it seems less likely they will get in trouble with mounting debt if their mindset is to not let debt accumulate.
Many a well-intentioned person has stated that they would only float a 2k balance for two months; then life happens and the debt becomes larger. Therefore, it's not just a PIF vs. non-PIF mentality; it's part of a larger commitment to not go down a path of increasing debt that builds monthly.
2) PIF allows you to build your cash reserves, emergency fund, and retirement fund, so more of your money goes to protect you instead of going to credit card companies. You then use the money toward your emergency fund instead of handing it to credit card companies.
3) Avoidance of interest.
4) Maximizing credit profile.
5) Establishing a responsible payment record with a particular lender or with multiple lenders. Certainly lenders like to collect interest to an extent, but many lenders will view a PIF person as someone who can be trusted to reliably do the same conservative behavior month after month and take care of their debt in full. Its reliable, predictable behavior. Past behavior is an excellent predictor of future behavior in many areas.
(That's not to say a lender would be ok with you charging 95% of CL and then paying in full - some level of moderation is key here).
6) It sets a good example for your children and spouse by helping you to teach them " we only buy what we can afford to pay for within 30-45 days."
7) A PIF mentality helps you avoid getting carried away with 0% offers. 0% offers are great and can be valuable in certain situations; but many a person has utilized multiple 0% offers with the rationale that "it's 0%, so that means it's ok and I may as well take advantage of it."
Nothing wrong with that; the difficulty ensues when a person does that with multiple offers to the point where he or she gets in over their head.
8) Showing you have the ability to PIF can go a long way with lenders when you may need something else from them in the future.
There are just a few reasons I can conceptualize off the top of my head. 
@Anonymous wrote:
@egaithe wrote:But why would you have credit (carrying a loan) just to pay it in full? That means you don't need it....just like those rollover minutes with AT&T (Cingular Wireless).
Several reasons (others, please feel free to add to the list):
1) Establishing a responsible overall financial plan and strategy. Occasionally carrying a balance is not an issue, but when people have the PIF mindset, it seems less likely they will get in trouble with mounting debt if their mindset is to not let debt accumulate.
Many a well-intentioned person has stated that they would only float a 2k balance for two months; then life happens and the debt becomes larger. Therefore, it's not just a PIF vs. non-PIF mentality; it's part of a larger commitment to not go down a path of increasing debt that builds monthly.
2) PIF allows you to build your cash reserves, emergency fund, and retirement fund, so more of your money goes to protect you instead of going to credit card companies. You then use the money toward your emergency fund instead of handing it to credit card companies.
3) Avoidance of interest.
4) Maximizing credit profile.
5) Establishing a responsible payment record with a particular lender or with multiple lenders. Certainly lenders like to collect interest to an extent, but many lenders will view a PIF person as someone who can be trusted to reliably do the same conservative behavior month after month and take care of their debt in full. Its reliable, predictable behavior. Past behavior is an excellent predictor of future behavior in many areas.
(That's not to say a lender would be ok with you charging 95% of CL and then paying in full - some level of moderation is key here).
6) It sets a good example for your children and spouse by helping you to teach them " we only buy what we can afford to pay for within 30-45 days."
7) A PIF mentality helps you avoid getting carried away with 0% offers. 0% offers are great and can be valuable in certain situations; but many a person has utilized multiple 0% offers with the rationale that "it's 0%, so that means it's ok and I may as well take advantage of it."
Nothing wrong with that; the difficulty ensues when a person does that with multiple offers to the point where he or she gets in over their head.
8) Showing you have the ability to PIF can go a long way with lenders when you may need something else from them in the future.
There are just a few reasons I can conceptualize off the top of my head.
I'd say you did a pretty nice job off the top of your head if you ask me
Good job
@Kevin86475391 wrote:
@egaithe wrote:But why would you have credit (carrying a loan) just to pay it in full? That means you don't need it....just like those rollover minutes with AT&T (Cingular Wireless).
Great response from humuhumunukunukuapuaa and certainly not much I can add, but for me it's definitely primarily for the rewards and to keep my credit profile strong.
The fundamental nature of credit is that you can most easily get it when you don't need it. When you do need it and don't have it...it can be really hard to come by. If you've never had credit before and suddenly decide it's time to buy a new car, or new house, and you don't have the cash to pay for it outright, you're going to be in trouble. So basically if you're ever planning to need good credit, it's best to start as soon as possible and have years to build it up without an urgent need looming.
That said, you want to avoid interest, fees, and other costs as much as possible while building/maintaining good credit, and the best way to do that with credit cards is to only spend what you can afford to PIF. In essence you're PIFing for your daily expenses because some day you may not be able to PIF for a house or car and you want to get the best terms possible. Of course you don't have to PIF to build good credit, but that'll cost you extra and indeed will often be a longer, slower process than if you were able to meticulously keep your utilization constantly low by PIFing.
Also, like those rollover minutes in your example, even if you're not using them, it's nice that they're there. Maybe (ideally of course) you do have the money to pay for a sudden large expense, but that doesn't mean the money is sitting right there in your checking account ready to go at a moment's notice. It might be in multiple checking accounts, a savings account, a money market account, or a short- or long-term investment. The credit card on the other hand can be sitting in your wallet ready to go and once you swipe it you'll have at least a month to get your ducks in a row and PIF before you pay any interest. It's a good deal.
All great responses. I am now opening another savings account, and accumulating my cash back there. I do it for the cash back as well. If something goes on payments, it is at 0%, and allows me to pay off in time or before, and I can keep saving and investing. Otherwise, credit for me is getting paid to buy, rent, pay utilities, etc (and I think I have just about every category covered 
).