Why are you crazy people so terrified of credit cards?

Question

Every answer in credit seems to say credit cards are bad.
They can be used to get interest free money, to earn points, to defer payment so money remains invested, to improve security (sect 75 consumer credit act) + to lower payments in absolute coz some companies prefer them.
Saying credit cards loose you money is like saying all shares fall.
What is wrong with you?

Answer 1

'cos they know they are unable to take responsibility for their spending. They like to blame the card companies, which is true they are partly at fault, but they are not bending your arm to buy. It's called control....most people with cards don't have it, and almost wonder why they are getting a call to pay their bill.

Answer 2

Credit cards, by definition, must lose their holders money; if you use a $50 bill to pay for an item, it costs you $50. If you use a credit card, the extra steps in money transfer cost money to make, so buying a $50 item with a credit card HAS to cost SOMEONE more than the $50 to make up the difference! Otherwise the credit card companies would not be doing so very well.

The sad reality is that the vast majority of credit card users lack the simple discipline to pay their bill in full each month (which does turn a card into a teriffic tool), and so pay interest thru' the nose. And most people carry a sizeable balance.

Answer 3

Credit cards do lose you money. Their only absolute benefit is their help in building a credit history, but on the other hand things like paying all your bills on time, living in the same home for a long time, and a steady, high-paying job are even better.

Credit cards are evil to the average person for two reasons:

1) They make it so much easier to spend money. Next time you buy something expensive, like a high-definition plasma TV, instead of charging it on a credit card, go to the bank and withdraw the $2,000 it takes to buy it. See how it feels counting out that cash for the TV, and contrast it to how simple it is to pull out the card and slap it down. In many cases, you are going to buy something anyway, but using a credit card encourages you to spend more.

2) Every credit card comes with interest charges, and these average 15% these days. What "interest-free" money are you talking about? You can get special 0% balance transfers for 6 months sometimes, if you're lucky, and continue to switch the balance to new cards, but few people have access to those kind of continuous offers. On the other hand, most people keep big balances of thousands of dollars on their credit cards, at 15% interest annually, costing them hundreds of dollars of interest each year. The stock market has averaged 10% rise annually in the past 75 years. Real estate averaged about 5% appreciation a year. Yet you're paying 15% a year to a credit card company for NOTHING. In almost every case, it's better to pay cash.

So, the answer to your question is, there's nothing wrong with us, what's wrong with you? Potential answers:

1) You work for a credit card company
2) You're independently wealthy, and have no need to worry about interest-rate charges on credit cards (in that case, can I borrow some money interest-free?)
3) You have no idea what you're talking about (my personal favorite), and will end up in personal bankruptcy several times in your short, painful life

Answer 4

Previous posters have made a very good point; that CCs are easy to mismanage. I've been there. Got many T shirts... :(

However, now I'm able to pay the bill every month in full, and I also get a full 3% cashback on all my spend. It works out at about £30 per month at the moment.

So, CCs are not intrinsically bad, but many people (me, too) have had bad experiences of using them.

And I have to agree they are so useful when it comes to sorting out complaints on purchases - joint liability with the provider.

Answer 5

A lot of people still can't get one due to low credit scoring.
The interest rates are still incredibly high.
Oh, and do you work for a credit card company by the way?

Answer 6

Credit cards are fine provided you pay them off at the end of each month. If you do not, the interest is very high indeed. It is definitely worth paying for things on your credit card, such as holidays, because you always have a comeback

Answer 7

I am scared of credit cards and checks. I just believe its another wya to get money that consumers don't have. If you like them, good for you. Not everyone feels the same about credit cards.

Answer 8

They are good provided you can pay them off in full every month. Most people find this difficult, and the temptation to overspend is too much. It is then that they become bad, because of the huge interest rates levied, which bear no relation to the money markets that way other ways of borrowing do.

Answer 9

What you say is true,but not everybody is wise enough to manage their finances correctly. Many credit card users,
especially university students who've just acquired them,fall
into heavy debt because it's so easy to do so with the freaking
things. These days I only have one,which I keep for emergencies.

Answer 10

Thing is, too many people have them and dont use them sensibly, you've obviously got your head screwed on and know how to get the best out of one, most people just use them to spend money they dont have then end up paying a small fortune in interest.

Thier loss - and this just proves kids that smart people tend to have more money - now why could that be ???