Post by Tabetha on Mar 7, 2008 14:44:51 GMT -5
cemoses said:
Here are other advantages of credit cards if you can pay balances right away:1) many credit cards over rewards for those who use them. For example some credit cards give points that can earn extra cash or used towards airline tickets etc.
2) You can fight unfair charges of merchants with the credit card copy.
However, I think when most people talk about credit card usage there usually is the implication that people are not paying off their balances in full every month.
Credit cards can definitely be useful as long as you exercise *a balance of self-knowledge and self control*. If you know yourself well and are prudent with money, they can make your life a lot easier and help you build up a good credit rating which can be helpful should you ever decide to start a business; another way to make your money work for you.
(Depending on the business you're in, when dealing with other vendors *as a business*, some suppliers won't deal with you unless you have an established and reliable credit rating, regardless of the cash on hand).
I don't have any credit card debt and the rare times I use my cards I pay the balance off right away. I always pay for large and/or accommodation purchases (like laptops, hotel stays, and air travel) with a credit card because it offers me an extra layer of protection if I need to return or dispute the charges on an item or service. On large ticket items, cashback and reward points can really add up.
They've also saved my bacon on a couple of occasions. I remember when our dog Penny was 3 we were alternately tossing a tennis ball to her in the field when she must have caught it at the wrong angle and knocked out a tooth. Her gums were really bleeding and we had to rush her to the vet. The convenience of having a credit card really came in handy that day.
Ninja, since you describe yourself as a bit financially chaotic, credit cards may not be the best choice for you at this point in your life.
However, in the long run, the positive reinforcement that comes from you building up your savings may end up leading you down a path where you will rightfully feel more organized financially. At that time, credit cards may end up being a useful tool for you.