Some people think my wife and I are crazy for never owning a credit card and should get one. We are 22 with no debt besides our house. I guess we aren't fixated on our credit score like many other people. We own debit cards but have never felt the need to get a credit card. From all that I have heard, credit cards can do a whole lot of harm, but not that much good. So why do people own them? Any thoughts are much appreciated, thanks!
2007-10-22 14:29:50 · 15 answers · asked by Anonymous in Business & Finance ➔ Credit
Everyone seems to bring up emergencies as a main reason. Why not have an emergency fund in place (3-6 months expenses) like most competent financial planners suggest so you don't pay interest on your emergencies?
2007-10-22 14:42:24 · update #1
i dont and never will.
2007-10-22 14:32:35 · answer #1 · answered by Anonymous · 1⤊ 3⤋
First of all, yes you do own your debit cards because when you use them....the money is taken directly out of your bank account where your income is deposited. On the other hand, you do not own the credit card. The creditor issuing you the card does. Technically, when you use that credit card, you are taking out a loan from the card issuer.
I have credit cards, but I pay them off every month. I have them to establish credit history. Unless you have the cash to buy a home, try getting a mortgage with no credit history. It will not happen without at least two years of credit history. Plus too, I get points that I can use for free travel and hotels. The perks you can get are awesome. We are traveling for two weeks in November to visit family for Thanksgiving and guess how much we paid for roundtrip airfare? It was "buy one, get one free." We are saving 50% and we paid that credit transaction off already. So not only did we get a good deal on airfare, our credit history shines!
2007-10-22 14:42:34 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Credit cards are good to have if you need to rent a car. Some rental car companies will not rent to you if you try to use a debit card. Those that do accept debit cards usually require a lot of documentation (travel documents - etc), and it's a real hassle.
A lot of credit cards also have perks such as airline miles, cash back, free gas - etc. If you have no annual fee, and pay your credit card in full each month, it's a good way to get free stuff!
2007-10-22 15:01:36 · answer #3 · answered by ? 4 · 1⤊ 0⤋
Sounds like you're doing the right thing to me. Credit cards are for emergencies, but you two have a house that you can get a loan on if you have to. Besides those card things often end up being trouble. I do know a guy who uses his all the time and then pays it at the end of the month, before getting any interest, just so that he can get free plane tickets. I, on the other hand, have gone a little too far with mine, and am currently paying off one consolidation loan to get rid of them all, and then be like you folks.
2007-10-22 14:37:24 · answer #4 · answered by Porch 4 · 0⤊ 1⤋
Actually, they are good. Lets see... emergencies. I have a Dell card, for computer stuff which I am an IT student so I'm gonna keep it. I have a card for emergencies like a $600 vet bill for my dog to have surgery. Also, it helps your credit score. It shows how well you control your spending when you have money available. I have my amex charge card I put most of my bills on n pay every month.
Good point on the emergency fund but considering how much I pay for college I wish I had money to save. I'm working overtime just to cover that vet bill.
2007-10-22 14:34:30 · answer #5 · answered by Anonymous · 2⤊ 0⤋
GREAT JOB!!!!
We have an AMEX and a VISA. We use them mainly for emergencies (almost never) or when we travel. I travel on business some times and don't want to carry cash for a week's expenses.. Same applies when we take a family trip.
We use mostly our debit card, but put rental cars and hotels on credit then pay it off at the end of the month.
In short, we very very rarely use our credit cards!
I agree with you 100%. Don't let anyone change you!!!
2007-10-22 14:34:04 · answer #6 · answered by Anonymous · 0⤊ 1⤋
These days your credit and creditworthiness is being used as a primary factor to judge your character. Even when you apply for a job your credit score or/and history is used to substitute any personal references (along with your background check). Building your credit history without credit cards is just like mastering your driving skills without driving a car. Most of the time (regardless of your philosophy) absence of credit cards in your household will be interpreted as inability to acquire one. Even the word "creditworthiness" became substitute to a word "worthiness".
Besides necessity to have and use credit cards to build your "responsibility" portfolio, credit cards come with other benefits. Among those are rebates, miles and etc. Credit cards provide you with extra security during your financial transactions (unlike debit transactions, credit transactions do not impact your available funds if you become victim of credit fraud and can be disputed while you still did not loose a penny). You can also save hundreds dollars on your rental car insurance since most types of credit cards cover auto insurance on rented vehicles.
Having debts is not a problem itself. The problem is inability to manage them.
2007-10-22 16:15:22 · answer #7 · answered by Dr. Shakar 2 · 1⤊ 0⤋
My husband and I are also young and have no debt either but we each have a credit card. We rarely use them but when we do we pay them off in full each month. They are great to build and establish credit and while you may not be concerned with your credit score now, you will one day when you ant to buy a new home or vehicle. Credit cards are only bad when people abuse them and run up more debt than they can pay each month.
2007-10-22 14:34:49 · answer #8 · answered by ~*Bella*~ 5 · 2⤊ 0⤋
I guess these days, most places take debit cards. I think it's important to carry a credit (or debit) card, because you never know when you might find yourself short of cash. Also, you don't need to carry alot of cash on you at all times. Finally, you may need to make a fast expenditure (ie, a broken water pipe) which exceeds the amount in your bank account.
2007-10-22 14:34:25 · answer #9 · answered by Stephen L 6 · 1⤊ 0⤋
If you don't have one, don't get one. That is my advice. You are wise with your finances to be so young and only owe for your house. I got one because I had to travel for work and pay for my own expenses, then get reimbursed. I could not afford to pay for my hotels, food, etc. with the money I had so I got the credit card for that purpose. Then we ended up using it for other things. I have my credit cards almost paid off, but it's been a long process.
2007-10-22 14:34:41 · answer #10 · answered by Snowflake 5 · 0⤊ 1⤋
I use mine to shop online, especially to order theatre tickets and reservations. If you ever want to rent a car or reserva a hotel room, you'll need a credit card.
You must have some kind of credit if you were able to buy a house. At 22, that's pretty impressive.
2007-10-22 16:15:11 · answer #11 · answered by Debdeb 7 · 1⤊ 1⤋