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Posted: 5/1/2009 6:04:58 PM EDT
I've been talking to some people at work who only use credit cards to buy things and then pay off the balance at the end of the month.  They get all sorts or "rewards" or flight miles.  I'm wondering if in the long this is a good idea.  All that free stuff adds up after a while.  Also which card is the best for doing this?
Link Posted: 5/1/2009 6:07:34 PM EDT
Yeah, its great until they drop your limit and dont tell you. And you try and make an out of the blue 500 dollar purchase.
Link Posted: 5/1/2009 6:08:57 PM EDT
Originally Posted By beltfed74:
Yeah, its great until they drop your limit and dont tell you. And you try and make an out of the blue 500 dollar purchase.


Thats why I asked...
Link Posted: 5/1/2009 6:10:40 PM EDT
I use a Chase Freedom without issue or lowered limits


3% on groceries, Fast Food, Gas
1% on other stuff

Cash in $200 at a time get $250 check

Link Posted: 5/1/2009 6:12:45 PM EDT
The biggest problem is that a lot of people don't have the willpower to pay off their credit cards every month.

-Mike
Link Posted: 5/1/2009 6:12:49 PM EDT
We've got both a Disney and Marriott Rewards Visas.  If you travel a lot like me, then you earn points for free stays that we use all of the time.  

The Disney card is great too.  So far, we've built up almost $1000.00 worth of "credit" when we stay at the resort.

So yeah, for us, it's worth it.
Link Posted: 5/1/2009 6:17:11 PM EDT
Originally Posted By westmanm:
The biggest problem is that a lot of people don't have the willpower to pay off their credit cards every month.

-Mike


I dont see how, I dont have the willpower to carry anything charging interest, I throw everything to pay it off
Link Posted: 5/1/2009 6:17:11 PM EDT
Like one poster said, its great if you can really do it.

I think using my credit card has paid at least $600 in student loan payments for me.
Link Posted: 5/1/2009 6:17:52 PM EDT
[Last Edit: 5/1/2009 6:18:36 PM EDT by fudd022]
Do yourself a favor and stay away from credit cards. Yes, you need one to build and maintain a healthy credit score. I don't believe that many people have the discipline to pay their balance every month. Earning free stuff sounds good until you have an emergency that drains your cash so you start making monthly payments, which includes interest.

People with the highest credit scores rarely use credit. Last time I checked, I had an 806 Beacon score. Not because I have a long credit history but because my debt ($0.00) to income ratio is so low. Finance a house or land. Be prudent and save cash for everything else including automobiles. You start paying cash for a car and you'll find yourself in a 15K Toyota instead of a 30K+ (insert name) car/truck real quick!
Link Posted: 5/1/2009 6:19:12 PM EDT
Originally Posted By Taxman:
I use a Chase Freedom without issue or lowered limits


3% on groceries, Fast Food, Gas
1% on other stuff

Cash in $200 at a time get $250 check



This is exactly the card and rewards I utilize.
Link Posted: 5/1/2009 6:22:03 PM EDT
Just got a new laptop from my Credit Union card. Had to spend $138,500.00 over 4 years but it was about 75% reimbursed business expenses (hotels, meals) anyway. I never pay a cent in interest. It may not be a gold mine but it's something for nothing...
Link Posted: 5/1/2009 6:26:54 PM EDT
Originally Posted By fudd022:
Do yourself a favor and stay away from credit cards. Yes, you need one to build and maintain a healthy credit score. I don't believe that many people have the discipline to pay their balance every month. Earning free stuff sounds good until you have an emergency that drains your cash so you start making monthly payments, which includes interest.


Dont buy it unless you have the cash, keep a plan, its simple I been doing it since I was 19
Link Posted: 5/1/2009 6:27:50 PM EDT
Originally Posted By Hero:
Originally Posted By Taxman:
I use a Chase Freedom without issue or lowered limits


3% on groceries, Fast Food, Gas
1% on other stuff

Cash in $200 at a time get $250 check



This is exactly the card and rewards I utilize.


Same here, and pay it off every month.  Have savings for emergencies.
Link Posted: 5/1/2009 6:29:24 PM EDT
[Last Edit: 5/1/2009 6:29:43 PM EDT by jcarrel]
I carry cash just in case, but I try buying everything I can with my card and pay it off at the end of the month.  I have racked up tons of points. Paid for a flight out to NJ last summer.
Link Posted: 5/1/2009 6:29:28 PM EDT
[Last Edit: 5/1/2009 6:32:34 PM EDT by C6H12O6]
Originally Posted By fudd022:
Do yourself a favor and stay away from credit cards. Yes, you need one to build and maintain a healthy credit score. I don't believe that many people have the discipline to pay their balance every month. Earning free stuff sounds good until you have an emergency that drains your cash so you start making monthly payments, which includes interest.

People with the highest credit scores rarely use credit. Last time I checked, I had an 806 Beacon score. Not because I have a long credit history but because my debt ($0.00) to income ratio is so low. Finance a house or land. Be prudent and save cash for everything else including automobiles. You start paying cash for a car and you'll find yourself in a 15K Toyota instead of a 30K+ (insert name) car/truck real quick!


Ridiculous and wrong.

I worked for an issuer for 8 years and saw far more examples of people using credit effectively and positively than the reverse.  The bank I worked for issued a Visa card with a rewards program at a well-known hunting & fishing 'outfitter.'  We had hundreds of thousands of cardholders who racked up thousands in points to use in stores or for catalog/Web purchases.  I've seen folks buy M1As with only their points.  Granted, our bank was different than many issuers, since the majority of our cardholders weren't revolving their balances.  Still, we made tons of revenue off interchange fees.

Credit cards are an excellent way to track your purchases and rack up significant free merchandise or discounts if used correctly.  Also, credit cards are far safer than cash - since it's not your money.  Cash can be lost or stolen and you have no recourse.  With credit cards, if your card is lost/stolen, you have no liability.

Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.

Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799
Link Posted: 5/1/2009 6:30:20 PM EDT
My savings account is at EmigrantDirect and I have their affiliated MasterCard.  It's the only CC I have.  If I maintain a $10,000 or more balance in my savings account I get 1.4% cash back, deposited every six months into the savings account, with no annual maximum (some cards max at $500 back per year).

I don't travel enough to care about frequent flyer miles, and I have so much "stuff" already that I don't need to accumulate more with reward points.  So, cashback FTW.

I also pay the card off, in full, every month.  I've had a CC for over 20 years and have never paid interest on it.
Link Posted: 5/1/2009 6:30:46 PM EDT
Discover card; I get a few hundred dollars back per year. Consumer Reports has a credit card issue that gives you the details of each card. You can read the issue at a public library.

I use the card for daily grocery purchases and to consolidate many normal monthly bills, like cable, ez pass, into one check. I still have to mail out several checks monthly for other things, like phone and Electric, but the card means less checks, stamps, and not having to cary large sums of cash.

Do not use it for credit. If you don't have the money in your savings account, don't buy it.

Credit is a trap like drugs or gambling for many people.
Link Posted: 5/1/2009 6:36:54 PM EDT
[Last Edit: 5/1/2009 6:38:33 PM EDT by Taxman]
Originally Posted By broncobisley1:
Originally Posted By Hero:
Originally Posted By Taxman:
I use a Chase Freedom without issue or lowered limits


3% on groceries, Fast Food, Gas
1% on other stuff

Cash in $200 at a time get $250 check



This is exactly the card and rewards I utilize.


Same here, and pay it off every month.  Have savings for emergencies.


Other day I was at Food Lion bought $35 in stuff, thats $1 back.
How often do you spend that on food or gas, few times a week?  3 times a week thats $3 a week, $156 a year nearly $2000 over 10 years just for using the CC on those purchases and paying it off every month.

No spending money you dont have, just replacing cash/check/debit for things your normally buy that will be paid when the bill is in
Link Posted: 5/1/2009 6:40:05 PM EDT
I bought my NRA Life membership with my Discover Card cash back.  Credit Cards are not evil, they are a tool, use them wrong and bad things can happen.  Use them right....wow this sound like another tool we all like to use.
Link Posted: 5/1/2009 6:41:49 PM EDT
I've had a Mastercard for about 30 years now. I've never paid a cent of interest,ever. I really don't know how I could function without a credit card these days-everything I need is ordered online-I just ordered a refrigerator door gasket about 20 minutes ago. All the parts I need for my vehicles,tractor parts, furnace and a/c parts,you name it,and I get it online. But I pay that balance off every month without fail. I've also got an accumulated credit of about $2000 to apply towards the purchase of a new car on that card,too-which I plan to use soon.
Link Posted: 5/1/2009 6:43:14 PM EDT
[Last Edit: 5/1/2009 6:44:26 PM EDT by fudd022]
Originally Posted By C6H12O6:
Originally Posted By fudd022:
Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.

Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799


I apologize for my ignorance. It seems that credit card companies make enormous profits by giving away free gifts without earning interest.

My argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons??? Are you kidding me? Yes, Americans are great with credit. That's why our economy has crashed and the government is bailing everyone out. I'm guessing you don't comprehend the business section if you ever read it.


Link Posted: 5/1/2009 6:45:55 PM EDT
Originally Posted By westmanm:
The biggest problem is that a lot of people don't have the willpower to pay off their credit cards every month.


QFT.

For every person who makes credit cards work for them... there's hundreds (if not more) that totally screw themselves.

Link Posted: 5/1/2009 6:48:25 PM EDT
I also have a chase freedom card, and here are my operating guidelines. I stick to these like a religion.

1. You have $500.00 a month limit. Period. (the actual card limit is higher but I stick to 500)

2. You will use this card for three purposes: Gas, Food, Entertainment.

3. This card is to be treated as a debit card: if you don't have the cash free to use it, you don't.

I live off of this card from day to day and try not to carry cash. If I have money in the budget for a non-routine purchase, the purchase is to be made in cash. I monitor my spending at least every other day and chart the amounts I use for food, gas, and entertainment on an Excel graph so I can Identify trends in my spending and try to adjust things so that I can even it out. I also know I have about $16.67 a day to spend per month, so I use that figure when budgeting my gas and food expenses. Entertainment spending is made only after I have fuel and groceries.

I have used this system for 7 years and have not once paid a cent to interest or been late on paying the balance in full. I enjoy the rewards and use them to buy things I like or want. I keep a healthy emergency fund in case of unexpected necessary purchases and try to limit the amount of cash I have in my wallet, because I find it is much harder to track.

Link Posted: 5/1/2009 6:50:09 PM EDT
Originally Posted By C6H12O6:
Originally Posted By fudd022:
Do yourself a favor and stay away from credit cards. Yes, you need one to build and maintain a healthy credit score. I don't believe that many people have the discipline to pay their balance every month. Earning free stuff sounds good until you have an emergency that drains your cash so you start making monthly payments, which includes interest.

People with the highest credit scores rarely use credit. Last time I checked, I had an 806 Beacon score. Not because I have a long credit history but because my debt ($0.00) to income ratio is so low. Finance a house or land. Be prudent and save cash for everything else including automobiles. You start paying cash for a car and you'll find yourself in a 15K Toyota instead of a 30K+ (insert name) car/truck real quick!


Ridiculous and wrong.

I worked for an issuer for 8 years and saw far more examples of people using credit effectively and positively than the reverse.  The bank I worked for issued a Visa card with a rewards program at a well-known hunting & fishing 'outfitter.'  We had hundreds of thousands of cardholders who racked up thousands in points to use in stores or for catalog/Web purchases.  I've seen folks buy M1As with only their points.  Granted, our bank was different than many issuers, since the majority of our cardholders weren't revolving their balances.  Still, we made tons of revenue off interchange fees.

Credit cards are an excellent way to track your purchases and rack up significant free merchandise or discounts if used correctly.  Also, credit cards are far safer than cash - since it's not your money.  Cash can be lost or stolen and you have no recourse.  With credit cards, if your card is lost/stolen, you have no liability.

Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.

Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799


Cabela's FTMFW !   This is my travel card, I use it for all my expenses, carry no balance & laugh out loud when leaving Cabela's.

Link Posted: 5/1/2009 6:52:00 PM EDT
Originally Posted By fudd022:
Originally Posted By C6H12O6:
Originally Posted By fudd022:
Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.

Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799


I apologize for my ignorance. It seems that credit card companies make enormous profits by giving away free gifts without earning interest.

My argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons??? Are you kidding me? Yes, Americans are great with credit. That's why our economy has crashed and the government is bailing everyone out. I'm guessing you don't comprehend the business section if you ever read it.




Problem is we aren't holding people liable for their bad decisions, and the Gov't decided to bow to the Dem's wishes that everyone should get loans, ect... so they could own houses, ect.... even so they couldn't afford the lifestyle they had a right to..

Using your logic, if there was a ton of murders with firearms, but we didn't punish or hold the people liable or expect personal responsibility, then we'd just blame an inanimate object.  

Credit Cards are inanimate objects too.
Link Posted: 5/1/2009 6:53:57 PM EDT
Originally Posted By markg1117:
I've been talking to some people at work who only use credit cards to buy things and then pay off the balance at the end of the month.  They get all sorts or "rewards" or flight miles.  I'm wondering if in the long this is a good idea.  All that free stuff adds up after a while.  Also which card is the best for doing this?




This is what I do. I use the UPromise Card. Don't know if its the best, but I've gotten a few grand back over the years.

Link Posted: 5/1/2009 6:56:07 PM EDT
Originally Posted By beltfed74:
Yeah, its great until they drop your limit and dont tell you. And you try and make an out of the blue 500 dollar purchase.


Hmmmmm never happened to me. I use a American Airlines Citi Card and love it. I travel like a mofo so my mileage racks up.
Link Posted: 5/1/2009 6:57:03 PM EDT
I just got a Charles Schwab card, 2% back on everything put into an account at the end of every month. I don't use the card that much but it sure adds up.
Here Toy Go

-JTP
Link Posted: 5/1/2009 7:01:43 PM EDT
This is a good thread to hijack to ask a question - how can I use my AMEX points to get guns and ammo?  I have over 500,000 AMEX rewards points.  I do not remember their exact gift card selection but it is limited (no walmart, bass pro, dicks, cabelas, etc).  I could go the AMEX gift card route but you get a lot less for your points.  I know one of the Visa/MC issuers had walmart gift cards (22LR Federal bricks and 9mm Brazer Brass anyone?) but in my experience Visa/MC flat out suck for business use which is the majority of my use.  I can order $50k worth of stuff and ship it to the other side of the world and AMEX does not care.  But if I order $500 worth of stuff and ship it a mile down the road my Visa issuer gets their panties in a wad and locks my account.
Link Posted: 5/1/2009 7:04:06 PM EDT
Originally Posted By JakeThePimp:
I just got a Charles Schwab card, 2% back on everything put into an account at the end of every month. I don't use the card that much but it sure adds up.
Here Toy Go

-JTP


Thanks for the link.  I'm looking into this card.
Link Posted: 5/1/2009 7:05:58 PM EDT
[Last Edit: 5/1/2009 7:31:40 PM EDT by fudd022]
Originally Posted By broncobisley1:
Originally Posted By fudd022:
Originally Posted By C6H12O6:
Originally Posted By fudd022:

Problem is we aren't holding people liable for their bad decisions, and the Gov't decided to bow to the Dem's wishes that everyone should get loans, ect... so they could own houses, ect.... even so they couldn't afford the lifestyle they had a right to..

Using your logic, if there was a ton of murders with firearms, but we didn't punish or hold the people liable or expect personal responsibility, then we'd just blame an inanimate object.  

Credit Cards are inanimate objects too.


Woa - there isn't any of my logic to it. I didn't compare firearms to credit, another idiot did. My only logic is that everyone will abuse credit if they don't have skin in the game. That means, if you can't afford a 20% down payment you have no business buying it. Lending institutions never made risky loans until they were able to clear their books via securitization, thus replenishing the books for more risky loans.

I get the feeling that a lot of people here don't understand why the economy is collapsing.

Link Posted: 5/1/2009 7:23:13 PM EDT
Originally Posted By matthew:
This is a good thread to hijack to ask a question - how can I use my AMEX points to get guns and ammo?  I have over 500,000 AMEX rewards points.  I do not remember their exact gift card selection but it is limited (no walmart, bass pro, dicks, cabelas, etc).  I could go the AMEX gift card route but you get a lot less for your points.  I know one of the Visa/MC issuers had walmart gift cards (22LR Federal bricks and 9mm Brazer Brass anyone?) but in my experience Visa/MC flat out suck for business use which is the majority of my use.  I can order $50k worth of stuff and ship it to the other side of the world and AMEX does not care.  But if I order $500 worth of stuff and ship it a mile down the road my Visa issuer gets their panties in a wad and locks my account.



My Amex, just lowered what I can spend.  Bastards.   I use it for all online purchases.

Link Posted: 5/1/2009 7:34:41 PM EDT
I've never had one drop a limit.  They always raise the limits whether I want it raised or not.  i did have one once after several years suddenly wanted to start charging a $75 annual fee to keep the card.  I dropped them and got another card.

I currently use a Cabela's Visa.  Earns 5% at Cabela's and 1% everywhere else.

Link Posted: 5/1/2009 7:54:30 PM EDT
Get 10 of them at once, charge them all up on hookers and blow.  Then get a home equity loan to pay them off and start over again. We need new people to be irresponsible to fuel the economy.
Link Posted: 5/1/2009 8:11:54 PM EDT
[Last Edit: 5/1/2009 8:14:08 PM EDT by runawayabc123]
I have 3 credit cards and carry no month end balence.  In fact, I go "shopping" on the first day of the new statement to get the longest time before I actually have to pay for things.  I don't spend more then I make in a month.  

Discover gives you 1% back on everything and 5% back on special things.  You can also turns these rewards in for $25 gift cards for $20 (cabelas is on this list!)

I have a Gander Master card that is 5% at Gander and 1% everywhere else.  The rewards are for Gander only.  BUT the SOBs as of May 1st turned to 2%.  And Gander is way over prices, so I have to shop very carefully for it to actually be worth it.  

For the VERY displined: others will pull down 50K on the intro 0% interest/balance transfers (when you could get these like candy) and put the money in the bank earning interest (when you actually got interest) for the 12mo interest free period.  If you did it right, you came ahead several thousand dollars.  Any mistakes and it becomes a wash or a loss.  (Like using one of the 0% cards for anything or missing any payment).  It also really hurts your credit for a while, pulling all of the new lines of credit that is.
Link Posted: 5/1/2009 8:19:19 PM EDT
Ok, so everyone in this thread (including me) either pay off in full every month or say stay away, very evil!  

Who are all of the people with 10K credit card debts?  (And the 10 people with 20K to balence all of us out at 0K?)  

Meh.
Link Posted: 5/1/2009 8:23:47 PM EDT
[Last Edit: 5/1/2009 8:39:07 PM EDT by fudd022]
Originally Posted By runawayabc123:
Ok, so everyone in this thread (including me) either pay off in full every month or say stay away, very evil!  

Who are all of the people with 10K credit card debts?  (And the 10 people with 20K to balence all of us out at 0K?)  

Meh.


Lol - it seems that people don't post anything unless they've had positive credit experiences. All I know is that I've been in debt before and I'll never go back.
Link Posted: 5/1/2009 8:31:06 PM EDT
I travel for work every single week and use 2 cards. I'm able to pay them off every month.

Citi Drivers Edge Card
3% on gasoline
1% on everything else
and they pay you $0.01 cents for every mile you drive (drive 50,000 miles get $500 = new tires) Just submit the receipt for work done that shows your mileage when you do maintenance on the vehicle to get the mileage rebates.
I had $900 racked up on this card recently and it paid for the tires on my truck.

Amex Costco Cash Rewards Card
It is pretty much the perfect card for a person that travels frequently.
3% on gasoline
3% on restaurants
2% on hotels
1% on everything else
You get paid every year with the rebates you rack up and you don't have to use the rebates at a Costco. Only catch is your annual fee is a Costco membership, but as much as I travel I'll cover that in no time.

Link Posted: 5/1/2009 8:42:37 PM EDT
[Last Edit: 5/1/2009 8:45:03 PM EDT by C6H12O6]
Originally Posted By fudd022:

I apologize for my ignorance. It seems that credit card companies make enormous profits by giving away free gifts without earning interest.

My argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons??? Are you kidding me? Yes, Americans are great with credit. That's why our economy has crashed and the government is bailing everyone out. I'm guessing you don't comprehend the business section if you ever read it.



Many issuers are still making hand-over-fist profits, because they issue credit wisely - even with rebate/rewards programs, and even in today's economy.  As I stated, the bank I worked for made and still does make fairly healthy profits even with a robust rewards program, and they're not alone.  

The fact that some people have misused credit cards is irrelevant and does not mean that others haven't and can't resist the proverbial 'urge to splurge' and use these financial products responsibly.  Maybe they're not right for you - that's great - don't use them.  But telling people to stay away from them because some people are weak-minded and irresponsible paints everyone with a broad brush.  And your statement about wealthy folks not using credit cards is wrong.  I've seen countless account histories and industry information that contradicts your statements.  Tell me your experience - have you worked for a Nielson Report Top 50 issuer, or are your opinions simply a result of you reading the "business section" or watching scare-tactic hit pieces on Good Morning America?

Even if people have misused credit cards over the last few years (and the vast majority HAVEN'T), that's not enough to "crash" the economy.  Perhaps you didn't hear of mortgage lenders making risky loans to customers with poor credit histories.  Perhaps you didn't hear of companies like Merrill Lynch, Lehman Bros., AIG, Citi, etc. making incredibly poor business decisions about a wide range of financial products that didn't have anything to do with credit cards.  Wasn't that in your "business section?"

Originally Posted By fudd022:

Woa - there isn't any of my logic to it. I didn't compare firearms to credit, another idiot did.
My only logic is that everyone will abuse credit if they don't have skin in the game. That means, if you can't afford a 20% down payment you have no business buying it. Lending institutions never made risky loans until they were able to clear their books via securitization, thus replenishing the books for more risky loans.

I get the feeling that a lot of people here don't understand why the economy is collapsing.



Nice personal attack.
Link Posted: 5/1/2009 8:56:26 PM EDT
Link Posted: 5/1/2009 9:37:32 PM EDT
[Last Edit: 5/1/2009 9:49:43 PM EDT by fudd022]
Originally Posted By C6H12O6:
Originally Posted By fudd022:

I apologize for my ignorance. It seems that credit card companies make enormous profits by giving away free gifts without earning interest.

My argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons??? Are you kidding me? Yes, Americans are great with credit. That's why our economy has crashed and the government is bailing everyone out. I'm guessing you don't comprehend the business section if you ever read it.



Many issuers are still making hand-over-fist profits, because they issue credit wisely - even with rebate/rewards programs, and even in today's economy.  As I stated, the bank I worked for made and still does make fairly healthy profits even with a robust rewards program, and they're not alone.  

The fact that some people have misused credit cards is irrelevant and does not mean that others haven't and can't resist the proverbial 'urge to splurge' and use these financial products responsibly.  Maybe they're not right for you - that's great - don't use them.  But telling people to stay away from them because some people are weak-minded and irresponsible paints everyone with a broad brush.  And your statement about wealthy folks not using credit cards is wrong.  I've seen countless account histories and industry information that contradicts your statements.  Tell me your experience - have you worked for a Nielson Report Top 50 issuer, or are your opinions simply a result of you reading the "business section" or watching scare-tactic hit pieces on Good Morning America?

Even if people have misused credit cards over the last few years (and the vast majority HAVEN'T), that's not enough to "crash" the economy.  Perhaps you didn't hear of mortgage lenders making risky loans to customers with poor credit histories.  Perhaps you didn't hear of companies like Merrill Lynch, Lehman Bros., AIG, Citi, etc. making incredibly poor business decisions about a wide range of financial products that didn't have anything to do with credit cards.  Wasn't that in your "business section?"

Originally Posted By fudd022:

Woa - there isn't any of my logic to it. I didn't compare firearms to credit, another idiot did.
My only logic is that everyone will abuse credit if they don't have skin in the game. That means, if you can't afford a 20% down payment you have no business buying it. Lending institutions never made risky loans until they were able to clear their books via securitization, thus replenishing the books for more risky loans.

I get the feeling that a lot of people here don't understand why the economy is collapsing.



Nice personal attack.


You certainly work on the rosy end of the spectrum. My business is bankruptcy, foreclosure and eviction of sub-prime borrowers. How do credit issuers make profits hand-over-fist without earning interest? Perhaps you'll explain this business model to me.

I paint people with a broad brush and suggest they use credit wisely because it doesn't a majority to sink the ship. Over 40% of Americans have less than three months living expenses in savings while carrying debt.  

I didn't imply that the current economic situation is a singular result of credit card debt. The current economic situation is the result of easy credit in general. Zero money down auto and mortgage purchases. Furthermore, it's the result of securitization of every kind of loan under the sun, which allowed lenders to continue their questionable lending practices.

Today, it's private foreclosures. Later this year will bring commercial foreclosures and finally the auto/credit card/student loan industry will collapse.

So which major lender did you work for again? A Nielson Report Top 50 issuer sounds pretty impressive. I'd like to buy stock in a healthy financial company, if they have more than one branch.
Link Posted: 5/1/2009 9:57:18 PM EDT
[Last Edit: 5/1/2009 10:04:41 PM EDT by C6H12O6]
Originally Posted By fudd022:

You certainly work on the rosy end of the spectrum. My business is bankruptcy, foreclosure and eviction of sub-prime borrowers. How do credit issuers make profits hand-over-fist without earning interest? Perhaps you'll explain this business model to me.

I paint people with a broad brush and suggest they use credit wisely because the majority does not. Over 40% of Americans have less than three months living expenses in savings while carrying debt.  

I didn't imply that the current economic situation is a singular result of credit card debt. The current economic situation is the result of easy credit in general. Zero money down auto and mortgage purchases. Furthermore, it's the result of securitization of every kind of loan under the sun, which allowed lenders to continue their questionable lending practices.

Today, it's private foreclosures. Later this year will bring commercial foreclosures and finally the auto/credit card/student loan industry will collapse.

So which major lender did you work for again? A Nielson Report Top 50 issuer sounds pretty impressive. I'd like to buy stock in a healthy financial company, if they have more than one branch.


There's no denying issuing banks make huge profits off interest income and fees.  However, issuers also get revenue from other sources.

Card associations (VISA, MasterCard) that's called "interchange."  When a cardholder purchases something with a credit card, the merchant accepting the card pays a certain percentage of the transaction to their merchant bank.  This is called the "discount rate" and can run anywhere from something like .25% to 5% of the transaction amount depending on the merchant bank.

The card associations then distribute percentages of this amount to the issuing bank of the card that the cardholder used to make the transaction.  Cardholders that have high-dollar purchases monthly/annually contribute to the issuer's bottom line.

In addition, many issuers that offer rebate/rewards programs rely on the fact that a good percentage of rebate/reward amounts are never in fact used by cardholders.  For example, a cardholder uses his card for $100,000 worth of purchases in a year.  The cardholder earns 1% of this amount ($1000) in rebate/rewards points.  But instead of redeeming these points, the cardholder just lets them accrue.  The $1000 still accrues interest for the issuing bank.

The problem with your argument is that you did relate general problems with OTHER consumer credit products to the OP's question regarding credit cards.  No one's debating your points about bad business practices.  Also, the majority of Americans actually DO use credit cards responsibly - otherwise the market wouldn't allow it.  The corrections we're seeing now aren't affecting all issuers.

I worked for an issuer with over 1,000,000 accounts and over $1 billion in outstandings.  Thankfully, I'm out of that game entirely.  It got old dealing with the same old stereotypes and misconceptions that people held about credit cards.  I used to say, 'hey, it's not like I work for a tobacco company or something.'  Stock in this company is fairly affordable now.  But they've spent loads of money on new retail presences and I'm sure profits company-wide have suffered because of this.
Link Posted: 5/1/2009 10:18:59 PM EDT
I bought a gun safe recently with my yearly cash back from the CC; card changed banks though and now I have points
Link Posted: 5/2/2009 4:46:57 AM EDT
Originally Posted By Chris1836:
Originally Posted By matthew:
This is a good thread to hijack to ask a question - how can I use my AMEX points to get guns and ammo?  I have over 500,000 AMEX rewards points.  I do not remember their exact gift card selection but it is limited (no walmart, bass pro, dicks, cabelas, etc).  I could go the AMEX gift card route but you get a lot less for your points.  I know one of the Visa/MC issuers had walmart gift cards (22LR Federal bricks and 9mm Brazer Brass anyone?) but in my experience Visa/MC flat out suck for business use which is the majority of my use.  I can order $50k worth of stuff and ship it to the other side of the world and AMEX does not care.  But if I order $500 worth of stuff and ship it a mile down the road my Visa issuer gets their panties in a wad and locks my account.



My Amex, just lowered what I can spend.  Bastards.   I use it for all online purchases.



IF you have a business, AMEX business card is one of the greatest tools you can have.  This is not a credit card though, it is a charge card, you must pay in full every month.  On the other hand, if you have 500,00o points there really is not value to be had using it on guns and ammo, they will rape you of points.  I've found the best way to use points is travel.  You could take a flight cross country for around 120,000.  You can rent a vette from hertz for a week for around another 100,000.  And yes, they just cut my limit in half even when I usually send in double payments every month so I can keep using the card.
Link Posted: 5/2/2009 5:04:30 AM EDT
Yes, as long has you have an ounce of discipline you should use credit cards instead of debit cards.  Debit cards suck for just about everything.



1.  You will need to get a credit card:  Your first one, especially now, will probably have a low limit and few rewards.  That's OK.  It doesn't take very long to establish a good record of paying your bills and will qualify for more lucrative cards soon enough.  Also, your credit limit will go up over time.   Initially you may have to request an increase from the initial $500 or $1000 limit.



2.  Use it within the credit limit, and pay it off each month:  Don't miss a payment or be late!  That gets expensive!  Late charges can be almost $40, and finance charges can be pretty hefty on large balances as well.  A single day late can burn you.



3.  Don't get a card that has an annual fee, or if you do, make sure the annual fee is waived easily:  Example, my Shell gasoline card waives the annual fee if you make 10 gasoline transactions in that year.  Easy.  The card gives me 5% cash back the next month.



4.  Make sure your card does not accrue interest until payment is due:  Some cards start accruing interest immediately.  Avoid them.  If you are in doubt, ask.





You may get turned down initially if you apply for most of the popular rewards cards.  That is because they want established credit customers.  Your first card may have to be a lowly student card, or a bank provided credit card with little or no rewards and a low limit.  Stick with it for 6 months to a year, and then try applying for your favorite rewards card.
Link Posted: 5/2/2009 5:06:11 AM EDT



Originally Posted By fudd022:



Originally Posted By C6H12O6:

Originally Posted By fudd022:

Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.



Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799




I apologize for my ignorance. It seems that credit card companies make enormous profits by giving away free gifts without earning interest.



My argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons??? Are you kidding me? Yes, Americans are great with credit. That's why our economy has crashed and the government is bailing everyone out. I'm guessing you don't comprehend the business section if you ever read it.







Don't be an idiot.  None of the problems we are experiencing are the result of people being responsible with credit cards.








 
Link Posted: 5/2/2009 5:07:49 AM EDT



Originally Posted By fudd022:



Originally Posted By broncobisley1:

Originally Posted By fudd022:

Originally Posted By C6H12O6:

Originally Posted By fudd022:



Problem is we aren't holding people liable for their bad decisions, and the Gov't decided to bow to the Dem's wishes that everyone should get loans, ect... so they could own houses, ect.... even so they couldn't afford the lifestyle they had a right to.
.



Using your logic, if there was a ton of murders with firearms, but we didn't punish or hold the people liable or expect personal responsibility, then we'd just blame an inanimate object.  



Credit Cards are inanimate objects too.




Woa - there isn't any of my logic to it. I didn't compare firearms to credit, another idiot did. My only logic is that everyone will abuse credit if they don't have skin in the game. That means, if you can't afford a 20% down payment you have no business buying it. Lending institutions never made risky loans until they were able to clear their books via securitization, thus replenishing the books for more risky loans.



I get the feeling that a lot of people here don't understand why the economy is collapsing.









 
Link Posted: 5/2/2009 5:08:26 AM EDT





Originally Posted By fudd022:





Originally Posted By broncobisley1:


Originally Posted By fudd022:


Originally Posted By C6H12O6:


Originally Posted By fudd022:





Problem is we aren't holding people liable for their bad decisions, and the Gov't decided to bow to the Dem's wishes that everyone should get loans, ect... so they could own houses, ect.... even so they couldn't afford the lifestyle they had a right to.

.





Using your logic, if there was a ton of murders with firearms, but we didn't punish or hold the people liable or expect personal responsibility, then we'd just blame an inanimate object.  





Credit Cards are inanimate objects too.






Woa - there isn't any of my logic to it. I didn't compare firearms to credit, another idiot did. My only logic is that everyone will abuse credit if they don't have skin in the game. That means, if you can't afford a 20% down payment you have no business buying it. Lending institutions never made risky loans until they were able to clear their books via securitization, thus replenishing the books for more risky loans.





I get the feeling that a lot of people here don't understand why the economy is collapsing.








Why is it, Mr. "Skin in the game so I sound like Obama"?




 
Link Posted: 5/2/2009 5:10:38 AM EDT
Originally Posted By Blackwind:
Originally Posted By beltfed74:
Yeah, its great until they drop your limit and dont tell you. And you try and make an out of the blue 500 dollar purchase.


Hmmmmm never happened to me. I use a American Airlines Citi Card and love it. I travel like a mofo so my mileage racks up.



Capital One and HSBC both did it to me. I sometimes carried a small balance, sometimes I didnt.
Link Posted: 5/2/2009 6:34:55 AM EDT
Originally Posted By runawayabc123:
Ok, so everyone in this thread (including me) either pay off in full every month or say stay away, very evil!  

Who are all of the people with 10K credit card debts?  (And the 10 people with 20K to balence all of us out at 0K?)  

Meh.

I had a 15k balance at one point.  I didn't like my first major in college and (stupidly) turned into a bad student.  When I pulled myself back into shape and wanted to get back into the game my gpa kept me from qualifying for student loans.  I charged up a bunch of school expenses on my card and wound up at 15k when I was done with my degree.  I had it paid off a few years later and haven't carried a balance for something like 5 years now despite using my card for everything.

Just like guns, its a tool.  You can use it wisely and you can misuse it.  i'm glad I had that line of credit available.
Link Posted: 5/2/2009 6:40:40 AM EDT
Originally Posted By C6H12O6:
Originally Posted By fudd022:
Do yourself a favor and stay away from credit cards. Yes, you need one to build and maintain a healthy credit score. I don't believe that many people have the discipline to pay their balance every month. Earning free stuff sounds good until you have an emergency that drains your cash so you start making monthly payments, which includes interest.

People with the highest credit scores rarely use credit. Last time I checked, I had an 806 Beacon score. Not because I have a long credit history but because my debt ($0.00) to income ratio is so low. Finance a house or land. Be prudent and save cash for everything else including automobiles. You start paying cash for a car and you'll find yourself in a 15K Toyota instead of a 30K+ (insert name) car/truck real quick!


Ridiculous and wrong.

I worked for an issuer for 8 years and saw far more examples of people using credit effectively and positively than the reverse.  The bank I worked for issued a Visa card with a rewards program at a well-known hunting & fishing 'outfitter.'  We had hundreds of thousands of cardholders who racked up thousands in points to use in stores or for catalog/Web purchases.  I've seen folks buy M1As with only their points.  Granted, our bank was different than many issuers, since the majority of our cardholders weren't revolving their balances.  Still, we made tons of revenue off interchange fees.

Credit cards are an excellent way to track your purchases and rack up significant free merchandise or discounts if used correctly.  Also, credit cards are far safer than cash - since it's not your money.  Cash can be lost or stolen and you have no recourse.  With credit cards, if your card is lost/stolen, you have no liability.

Your argument about people misusing credit is similar to gun-control advocates saying people shouldn't be trusted with weapons.  A credit card is simply a financial tool that can be abused or misused just like anything else.

Edit for OP: If you couldn't guess, the card I'd recommend is the Cabela's VISA - https://www.cabelas.com/cabelas/en/templates/registration/cc_login-home.jsp?checkBin=true&_requestid=97799



Using a very similar card over the last few years I've gotten a free G17, tons of free ammo, and have $600 built up for a free G19...all for doing nothing other than using a card with great protections rather than my debit card for purchases and paying it off every month.
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