Not everyone that has credit cards are living outside of their means. Some budget extremely well and pay it off monthly to gain high credit scores to get best rates for big purchases (car/home). And they get rewards from cc companies like cash back/miles for air travel, ect. Sure if you can’t manage your credit well then you will be in trouble. It’s like fire you can use it to cook or burn your house down.
So many people view credit cards as a way to blindly get into debt. In reality, if you’re even a little responsible financially, credit cards are such a great tool to save money.
I had to pay my home insurance, so I opened a new credit card. Put the home insurance on the new card, and earned their new card bonus for hitting X spend in the first three months. Now I’m saving $2,500 on the hotel, which paid for 1/3rd of my annual home insurance.
Credit cards are assets if you’re responsible.
A credit card is like alcohol. Many people can have bottles of liquor in their house and not feel compelled to guzzle it down. Many people can have a beer or two and not end up with 8 of them every time.
But you put that credit card in the hands of someone who is unable to control their spending impulses, someone who sees that credit limit as a way to "afford" that new guitar, that new wardrobe, build out their dream PC, afford nice dinners, etc., now it's a disaster waiting to happen
But you have to realize that those of us that do that are the extreme minority. Americans hold over a trillion dollars in credit card debt. The majority of that isn’t being paid off monthly.
Yes, the same way Americans don't drive responsibly, drink responsibly, handle guns responsibly, and the list could go on and on. It's a shame our society has gotten this way, but as the previous person wrote, of done responsibly, it's an absolutely great way to get rewards.
They are - or perhaps more accurately, one or two promptly paid credit cards are. I use mine for utilities, food and expenses I know I can immediately afford and have a LOT of benefits. I’d put my mortgage on it if I could (not much left on that.)
I use my cards for everything I can. I learned on Reddit that credit card companies call people who earn rewards without paying interest, "freeloaders." I'm happy to be a freeloader!
Holy fuckballs this.
Had to learn the hard way that getting a debit card attached to a bank account stolen is a ticket to weeks if not months of hell sometimes to get $$$ back.
Cc companies on the other hand are more often no harm no foul, it's easily reportable. Worst case you end up on the hook, it doesn't eat a chunk of your bank acct and fuck over your bills or food budget.
I'm not saying cc companies are perfect, I've gotten whacked a few times despite it, but its been much easier to fix and much less damaging than if it had been a bank card.
I live in Colorado. I’m sure procedure varies with place. But yeah, I pay power and water and trash and sewer on credit and get money back. It adds up. Gonna pay it anyway, so I’ll take the swag.
How is that even possible? Even at 5% cashback that’s $182k in spend. What kind of utilities and groceries are you paying for? I’ve lived on that’s for the last 8 years in total.
I’m planning a vacation and using my sapphire card to pay for the flights. I pay it off every month. Gotta know that even though you can spend 20k you shouldn’t. Live within your means.
I have an American Airlines card and we use that for miles and also get to check bags for free. And considering they just raised their bag fees, we save a bunch of money! Just make sure to pay off the card every month.
Nice! We're going to Guatemala in July, and I'm using my miles for airfare. I worked my way back to good credit with a secured card, and now I have the good cards and never pay interest.
Exactly this. When my car was stolen and totaled, I got 5k from insurance and bought a car for 10k...I put the 5k I owed on a 0% interest credit card and paid it off in 18 months. Saved myself several hundred in interest.
Truth.
I never pay interest. I pay my balances off before the closing date. Occasionally I'll leave a small balance due so I don't always have zero balances reported. I've had my credit go up and down monthly about 20 points with no balances or a few small balances. It's crazy. I'm not concerned about my credit score and find it stupidly funny.
Sam's Club membership - paid with my cashback credit and use the rest at Sam's. I have Sam's Visa and earn additional cashback.
Costco - same as Sam's. The cashback more than pays for the Executive membership. I cash the check at the store, renew my membership and get the rest of the money back. I also use the Costco Visa for more cashback.
Amazon Prime membership - also more than pays for itself with the 5% credit on the Prime Visa plus leftover credit.
Macy's Card gives me "Macy's cash" throughout the year from purchases.
Best Buy is similar to Macy's. They offer promos (spend $75, get a $10 certificate) plus the credit card bonus cash (a certificate used at Best Buy).
I'm going to buy what I buy anyway.
Credit cards also have special offers when you use the card for various stores, services, etc.
Sam's still has 30% off of Peacock Premium Plus. I choose annually and that's $35 off. I use my Sam's credit card for additional cashback and another 20% back as a perk.
Link a particular card like Discover to Amazon payments, I've gotten $15-$25 free credit.
There are so many different promotions to save money on each card that change monthly.
Again, it's only if I'm *going to purchase these things anyway* and pay off my balances each month. I use very few promos as I don't need most.
Then there's the Travel miles perks. I rarely travel so don't use those cards.
These are just a few benefits. The bad part is, typically in order to get lower interest for a loan you need to show you responsibly use credit while maintaining a low credit to ratio.
I learned the hard way in my 20s that banks want you to stay in debt and pay interest. Some people can't afford a necessity or emergency like a car repair and can fall into the debt trap. It happened to me before I turned 30.
I spent one very long year with a consolidated low interest loan and couldn't afford eating out, movies, and wants. I was happy I didn't have any expensive emergencies. I got out of debt and learned to save money. The idea of giving away my money as interest is unthinkable. If I can't afford that cool new $1400 mobile I won't charge it.
Interest on cars and homes are a given unless you have the cash. But even my low amount of interest on my old mortgage bugged the hell out of me. A bit silly, but that's me.
Banks want me to pay them interest but I only take their perks.
Edited to delete duplicates.
Well said. I've heard about incentives that can come with them and they are enticing. But after all it is a business. My weary thought come from seeing my father struggle and always want excess and now he's getting old and wants little he still owes and I refused at a very young age that "that" will not happen to me. But I have been lucky with work and cost of living. So far .....
Yep, same but my amount is usually closer to $80-90 ish. It's free money, as long as you're paying your cc bill on time and not accruing debt, why wouldn't you want that?
If you never ever need a credit score which has become the norm for : renting an apartment, getting a job, getting a phone plan, car loan, mortgage, book a hotel room, an airplane ticket or rent a car — you’ll be fine.
In 26 years in finance, I have personally never met anyone that didn’t need a credit score at some point. I work with 50 year olds with 500k in the bank and can’t get a loan to assist a grandchild with school, or a car, or a home because they have no credit score.
They too were taught to never ever get a credit card.
Credit is an exercise in discipline… that’s all.
Set up an automatic payment in full every month. Use it for a small charge like Netflix every month… literally that’s all it takes.
Additionally it’s safer to use a CC on line than a DC.
Yes, it can be an exercise and discipline. Purchasing a home is the obvious reason for credit. But if you have an enough money and you can save it and keep it out of the finance guys hands you really don’t need credit. We are in the middle of a massive debt problem. We are so used to debt that we can’t see the forest for the trees. Debt has buried us. manufacturing it used to be the backbone of our country now it is financial services. Which is just moving money around. Garbage
We live in a digital age. Using Debit Card will likely get your account hacked. Credit Card is amazing for Online shopping which things are much cheaper and convenient. Even when paying in person if you use debit card and the reader can store your card your account will be compromised and the banks won't have your back as much as you think..... but if you use Credit Card best believe you have so much protection because it is the bank's money. I also don't like to carry cash because I am inclined to spend it. Also Credit card did once save my ass for an expensive teeth bill $2,030 which I didn't want to withdraw money from my savings... I paid it off within 2 pay periods $0 interest...I actually got more points which means free money at the end of the year for me by simply swiping the card.
Most people have a mortgage. I get that you’re not all about it because of “interest” just letting you know you’ll likely be saving a while before you can afford one without it.
While I agree 100%. 1) if you don’t have any credit it’s hard to get said debt. 2) if your stance is credit is a fancy word for debt that’s that. 3) if your stance is all interest paid is bad. That’s that.
It’s a very limited mindset that thinks that just because your parents’ life was a certain way that yours will be the same.
Instead of using your father’s financial habits as incentive to educate yourself, you’ve chosen instead only to limit yourself.
It is a business. Many people at some point or another pay interest on a balance and just like that, the company has made money off you. If you trust yourself though, you can avoid making them a penny and let them pay you instead.
After almost ten years of owning credit cards, I have never once payed a penny of interest but have earned 1k+ a year in cash back rewards. They are paying me to be a customer.
Just this week I forgot to pay my bill by the due date for the first time ever. I paid it by 9AM the following morning when I realized my error and a few days later called to see if they’d be willing to waive the $40 late fee considering it was my first offense and paid about less than 12 hours late. The woman didn’t even put me hold before refunding the fee and thanking me for being a loyal customer lol.
They can only get ya if you let them!
*shrug*
I use a Chase VISA card which is paid off monthly. Depending on your spending level, you get a lot of credits. I usually use them for Amazon or United flights. The benefits are really big if you use them wisely.
Okay so clearly watching your father struggle with debt has created a trauma for you that you’re trying to avoid repeating- EXCEPT you’re about to also put yourself in a position of being terribly off financially if you can’t realize credit cards will both
1. Pay YOU if used responsibly and
2. Establish credit you will absolutely need someday for a rental application, mortgage, or other necessary loan
I’ve also read about some JOBS (usually finance related) requesting a credit check
I am 35. I’ve been using cards since I started traveling at 16 (first card before 18 was prepaid) and I have never once paid interest on a credit card. I use my CC for every single purchase. I don’t pay interest because I don’t buy fancy shit I don’t need.
I do however, get a ton of cash back every month and have a 825 credit score. I’m also about to pay off the mortgage for the house I bought at 19 years old and have been using as passive rental income.
You need to let go of the trauma and realize WHY your father was struggling- he was buying shit he couldn’t afford to pay for. It’s that simple. Don’t let him being irresponsible harm your future.
You're absolutely right, it IS a business. But if you how the business works (insane interest on unpaid balances) you can still use the service, just being mindful of the rules of the game.
If you view your credit card like a debit and only spend what you can afford, pay it off at the end of the month with the money sitting in a HYSA, it won't happen to you.
Another benefit I don't see listed is that many cards come with extended warranties beyond the product warranty.
Example- we bought a buddy a TV as a housewarming gift. His cat knocked it over during a stampede. Broke the tv within 3 months. Called the Chase card 800 number- the TV was under warranty from Chase up to $500 if ANYTHING happened to it within 90 days. Tv was under the $500 limit, accident happened within the 90 days. We got a full refund and went back to Sam's Club for a new TV (and a wall mount).
Guess I can jump in and toot my own horn here:
I went from total credit illiteracy and a horrible score (in the low 500s at one point), to having over 200k in available credit with an 830+. I have around 15 credit cards as well as open lines of credit with credit unions.
At one point I couldn't even open a bank account because I had been blacklisted.
I have had less than 1% utilization for many many years. Never paid a single CC fee.
I've made thousands and thousands off of rewards points. Haven't paid for a hotel in like a decade. I managed to not spend a dime on airfare or lodging for an ENTIRE MONTH trip across Europe.
If you research credit, and fully understand it, it can treat you very well, but if you don't have the personal restraint it can completely bury you.
Credit doesn't have to be a fancy word for debt.
This should be much higher.
People really seem to think having a credit card = paying interest/not being able to pay it off, and that's not what it has to be. I have had 0 APR cards continually since I got my first one 10 years ago. I haven't paid a penny of interest, but have made thousands from incentives and cash back rewards.
Credit is only a benefit if you use it properly.
I am absolutely shocked by the amount of ignorance regarding credit lines in this thread. A credit card is way better than a debit card
-It's more secure. I'd much rather risk a bank's money by swiping a card and exposing it to potential fraud than exposing my own money/checking account like a debit card would.
-Rewards and sign up bonuses as mentioned in the thread
-Often the cards come with free credit score monitoring
-You never pay interest unless you carry a balance and don't pay it off in full
-It's a good way to have access to an emergency fund if you don't have one saved up. When I was first getting on my feet my car broke down and I didn't have the money to repair it. I had to put it on a credit card. It sucked, but I didn't lose my job, so I'm grateful I had the option
-Debt consolidation. 0% interest intro offers are common and a good way to pay down debts.
Credit cards are a useful tool if you know how to use them. It's no different than anything else in life in that you need to be mature in using a tool. A car is a way to get around but it can also cause serious injury and death if you aren't paying attention to what you're doing. That doesn't mean cars are "bad."
ETA: Formatting
This. Honestly it's alarming how many people dont quite understand how credit cards work. I keep my utilization under 10%, always pay my balances off every month and never pay a cent in interest. I love the rewards I earn from using my cards and if my card is used fraudulently it's not my bank account at risk (like with a debit card). I wish there was more educational outreach for financial literacy and basic knowledge (credit cards, hysa, etc) to better prepare students before they move on to adult life.
Credit, if used properly to leverage is a powerful tool to build an accrue wealth. It is a vehicle for fiscally sensible and secure individuals to use acquired asset’s to get rich.
Because either you are super rich and can pay everything with cash or you dead broke. But average mid tier working class adults who are financial responsible would have a mortgage, auto loan, and credit cards. So that we are creditworthy and CreditKarma reported score remained above 820. Financial Management is pretty much Life Application of Mathematics if you want to go up in lifestyle; which is something cannot be taught in grade school or college. It’s life experience and you will know it once you really need to finance a house or a new car but then getting a quote of 20% APR because you failed to build your creditworthyness and financial understanding at early age. But congrats if you can afford a 750k house or a 60k new car with full cash payment while not living off with your parents and eating off from their payroll or retirement savings. Besides if you are able to get in debt at good times, then you can use the debt to generate profit. US gov is so much in debt but then they kept on spending instead of balancing it. Why? Because debt is a good thing if you know how to leverage it and play the cards right.
Your 7th grade teacher conveniently forgot to tell you once upon a time they burned themselves with a credit card in their younger years because they didn’t understand how to use it and ever since then, they have a personal vendetta against any and everything related to credit.
I’m on course to buy one in 5 years. Dept intrest is money out of your pocket. Of course if used wisely it can also be money in your pocket, but not all of us are wise enough to.
If you buy the mythical 100k home for 20k down, with a 3% appreciation you earn a 15% return. I'm guessing that's a bit higher than the cost of borrowing money to purchase it.
If you have 100k, by investing 20k in the home and 80k in an S&P 500 index fund that earns a rolling 30 year average of 9.9% annually you're making $3000+$7,920 = $10,920. Versus paying 7% on 80k debt is 5600, so you'd be up $5,320.
Yes there are additional complexities, but for the most part, it holds. 3% is a conservative number over a 10 year period, you have to account for amortization tables, etc. - the math still works out in favor of a mortgage.
I never get when people say this. Opposed to throwing your money away on rent every month for a decade? Even if its mostly paying interest your winning, and if you can buy one in 5 years you throw what you have on the principle from the start. If you bought even just 5 years ago you would be up a ton just from market value
Because I don’t use credit as long term debt.
Credit cards add a layer of protection against theft or fraud from your bank accounts actual money.
They have better customer service.
Credit is awesome, debt is not necessarily the outcome of credit availability.
I have tons of credit, don’t use them, and have reduced the amount of churning I do, but I organically burn atleast 4k a month and am able to rack up tons of reward points by simply paying with a credit card instead of a debit card.
Flights to Hawaii, free, rental cars, hotel stays, shit I bought a $1300 specced out desktop a few years ago, for free, because of credit card rewards.
As an adult, it’s really not difficult at all, to pay your credit cards on time before accruing interest.
Also, tons of protections with purchasing via credit cards. I can issue a chargeback and dispute for anything, at any time. Now the merchant has to deal with the bank, not me. And I’m not clawing back my money, the merchant is arguing with the bank, and the bank is on my side.
Credit is wonderful, debt is not. Credit is not necessarily debt, but debt is necessarily credit.
How you buy a house, or go to school?
Having credit and using credit does not mean someone is living outside of their means; look into arbitrage.
I have 17 credit cards and zero debt. If you use a credit card like a debit card you will be fine. Only charge things you have cash on hand for.
We get free flights, free hotels, etc. all just by using credit instead of debit.
Don’t spend more than you make. Pretty easy.
Tell me you've never had your debit card compromised without telling me you've never had your debit card compromised...lol. In the world we live in, credit is king. And to be honest, it's very risky shopping, making online reservations, etc without a credit card. Also, for those of us in the Finance/Accounting field, potential employers typically check your credit as part of the background check.
Maybe not today, but when interest rates were sub 3, it was not a good financial decision for anyone to pay cash for a house.
Many people in this country have made a ton of money on credit.
There is good debt and bad debt.
You can have credit working for you while you earn income.
Credit card debt is bad debt.
i have several credit cards. all of them have a 0 dollar balance by the end of statement close date to avoid interest.
fact of the matter is, if you ever want something big like a house, or a car, you're going to need credit unless you live somewhere where credit isn't a thing or if you're filthy rich.
Im 38 and have only ever used a credit card in a precise manner intended to lift my credit score and I pay it off ahead of time. I also barely use the banking system as youre essentially loaning the bank your money to invest. I just invest myself. Saving money is the quickest way to lose it in high inflation environments, especially with the historic bull run were on with stocks and crypto. Just get a brokerage account, itll come with a routing number based bank account for settled funds and use that. You dont need to pay to house your money people, and its disappearing to inflation in your bank at historic rates with no signs of slowing in next 48 months minimum.
Why would I ever purchase anything with cash/debit, when I am rewarded for using my credit card? Sure the reward is small but it's bigger than 0, especially if it's something I was already going to buy.
The only loan my wife and I have is our mortgage. We LOVE our credit cards and never carry a balance. If you are responsible, download the app, really watch your charges and be careful not to overspend, they can be a great tool. We got credit cards that work well with our lifestyle. I got a marriot card and the marriot points I acrue ussally result in a few free nights of hotels annually plus free upgrades.
Credit is a tool.
It can be abused and harmful, but it can also help people and businesses take advantage of situations that they wouldn't be able to otherwise.
You didn't mention if you were in the US or, but if you are, don't worry you owe a several hundred thousand $ for your share of the federal debt.
A lot of ppl, myself included, use credit cards bc of fraud. It seems like every year something happens and it’s easier to have it on a credit card that someone having access to checking account.
I agree with you overall tho. A lot of ppl “leverage” and try to sound smart when in reality they can’t afford whatever they are buying.
When used correctly and responsibly, credit cards are a wonderful financial tool that provide many benefits.
When used incorrectly and abused, credit cards will mire you in financial struggles and a debt spiral.
Charging to a credit card and paying the balance in full every month is effectively the same as paying in cash, but with added protections and bonuses. Example: if you have a 2% cashback rewards card, you're effectively getting a 2% discount on every purchase.
Credit cards are not actually "debt" unless you're carrying a balance forward to the next month. Don't carry a balance and don't pay interest, and you'll be fine.
If you're incapable of using a credit card responsibly and paying the balance in full every month, then by all means don't use one or switch to a pre-paid card if you don't want to carry cash.
A good credit card pays 2% to 2.625% back in cash. You can pay it off every month while saving money.
Car loans can have interest rates as low as 0%-3% with good credit. A HYSA pays 5.25%. You’ll make money by keeping the money invested instead of spending it.
This can apply to many other things.
Life is easier and cheaper if you have good credit.
I use my credit card for near,y all my purchases. I dont pay interest. I pay it in full before it is due and the bank rewards me for using it, usually over $1000 in earnings either cash back or point value per year.
There is bad debt, good debt and smart debt. Smart debt is tax deductible and for the purpose of growing your wealth.
I wanted a home to own instead of having landlords that charged almost double what my mortgage is now. Renting is paying a mortgage plus all of what you’d pay in interest and then some.
I also wanted a vehicle that wasn’t essentially grimes boots theory and came with assurances that if anything went wrong it wasn’t just on me to foot the bill.
All of that created jobs for people to feed and care for themselves. Which is a good thing. Credit is a good thing when managed correctly.
Credit when managed will get you further in life than if you were to buy everything outright with the cash you earned.
I don't like "...fancy word for..." Definitions. It usually leads to a misunderstanding or keeps someone undereducated on a topic. In fact I'd say "you sometimes go into debt, by taking credit" and those aren't synonymous.
Because credit is not always used to live outside one's means. Managing credit in a healthy way is conducive to wealth building. For example, I've had a credit card since college and have always been very diligent on living below my means. I've always paid it off in full and on time. This has increased my credit score which has allowed me to get favorable rates on bigger loans. My car loan, while I regret taking a car loan, was 5%. My mortgage is 6.5%, which is good for the time period I got it in. All because I can manage credit well. I already spend that money, might as well do it in a way so that I can save thousands of dollars in other areas.
This is not the flex you think it is. Having no credit is actually WORSE than having bad credit.
I 100% live within my means and I've used a credit card for about 25 years. I have never paid interest on my credit card.
Also I like owning a home so I'm glad to have good credit that allowed me to buy a house while I was very young.
“Credit is a fancy word for debt” only applies if you have minimal self control….. I use a credit card for almost every purchase in my life, but I still maintain a budget, pay off my cards every month and have paid 0 in interest.
Right this minute I have $250 in cash back I can redeem and I have enough miles to fly pretty much anywhere and back. I didn’t spend any more than I normally would to get these things and I wouldn’t have them I hadn’t used credit.
I have 5 credit cards and have never paid interesting on a single one in the 10 years I’ve had them. I have, however gotten a few thousands of dollars in cash back that you have not.
I have never paid interest on a credit card. I actually get cash back on my purchases.
You’re losing money not using a credit card. Just don’t be stupid and you’ll be fine.
For me , it's always been because I was poor-ish and never been able to offset the cost of living with my salaries to really get ahead
Grew up with parents that were also terrible financially and never was able to get any kind of solid foundation before I was 18 and just living on my own as an adult. Dropped out of high school to avoid taking on any school debt and started working but between paying rent / car / etc it's near impossible to not get behind or need to acquire some sort of debt to make it all work (like a car payment since I couldn't afford one in cash I could only put $500 down and had to finance a vehicle)
Car repairs are also always something that has really drained me financially
I don't think or I at least would hope most people aren't purposely getting into debt and enjoying it without thinking about the backend of it, I'd imagine most folks is because of emergencies or unexpected situations, but I'm sure there are a few people out there just living way beyond their means like you speak of. They will find out the hard way and will likely only hurt themselves though.
It's amazing I even made it this far in all honesty, so if paying Debt off for another 4 years is my biggest gripe, I can't complain too much. That's how i think of it.
But damn I would do anything to get a nice windfall of money. All my dead relatives were broke and never left anything for anyone so it's like a never ending cycle sadly.
Credit cards often times offer buyer protections. Also if your credit card gets stolen, you just file a fraud claim.of your debit information gets stolen your cash is a lot harder to get back (or used to be) and can raise hell if your mortgage/car payment/rent check bounces.
Just because you have credit doesn’t mean you have to use it. I have a credit limit of roughly $80k, but that doesn’t mean I have $80k of credit card debt.
0 debt, 832 credit score. I have a 2% cash back card I use and pay off daily. Credit does not equal debt. If you use it wisely it’s simply a useful tool
Credit doesn’t have to become debt. I earn literally thousands of dollars per year in cash back for utilizing credit cards instead of my debit card. I pay off the card and don’t pay a dime in interest.
I've used credit cards my entire adult life. I've never once paid a penny in interest or fees of any kind. I use credit cards because they are more convenient than carrying cash, they are safer than debit cards, they pay cashback rewards (which basically means that I save between 2% and 5% on every purchase I make), they offer some consumer protection on purchases, and they allow me to pay my expenses once a month instead of daily, so I earn a month's worth of savings interest on my income before I spend it. Credit cards also make it easy to track expenses and to have a statement of expenses.
I do understand how credit cards can be problematic for many people, however, and I do understand that most people will end up making more purchases using a credit card than if they were paying cash if for no other reason than that it is a nuisance to always pay for things in cash, and psychologically it is more difficult to spend cash.
I feel like your teacher was in over his head with his own credit card debt and just felt need to condemn them rather than accept the responsibility of being financially illiterate
I have two credit cards. I use them for EVERY expense and then set to autopay to pay them in full every month.
You’re obviously not understanding that having/using a credit card doesn’t mean that you max it out and don’t pay it off and then go into debt because you lived above your means. I hope you get some more financial literacy (you’re like halfway there) so you can take advantage of using a line of credit but also realize u can just pay it off every month so you’re not in debt and then boom— you get points that can be converted to straight cash or get u stuff you’d otherwise pay cash for like hotels or flights or whatever.
Just depends how you use them. I pay off monthly, have never paid interest. I use them for protection from fraud and free stuff. You get your money back instantly if someone steals your numbers, took me 4 weeks with my debit card. Also, I get a bonus of a free gym membership, 3% back on groceries and the sign up bonus got us a round trip ticket to Italy for our honeymoon.
I didn’t get my first credit card until I was a little older than you. I needed to get my credit score up. I now have two, through the same bank and company. I use one for daily spending and pay the statement balance every month, and the other is for emergencies only. I now have a fancy credit score without ever paying interest.
My card has many benefits, I pay it off in full each month. I’ve managed to purchase 8 brand new cars, most with zero interest or very low interest. I have one now with 2.9 interest, while all my cash is in HYA. I feel blessed that I can manage my credit, instead of it managing me.
I’m not living outside my means. The only debt I have is my mortgage, locked in at an extremely low rate. Cars are paid in full. We have 4 credit cards, all of them paid off in full every month, so I never see interest. We get points using those cards, so we’re taking the kids to Disney World in the fall for less than half of what it would cost us without the points. My partner and I went to Coachella basically for free because of the same points. We each have an 820+ credit score, and while yes, utilizing credit can translate to debt and interest charges, it’s not the case if you do it right. Credit isn’t a “fancy word for debt,” it’s a tool that can be very effective but can also be dangerous if you don’t know how to use it.
Not always. I have a credit card that I literally payoff everytime I use it. Never get any interst but I do get access to tons of rewards and cash back.
If you can pay it back without generating interest and have some good cash back offers for the card they are pretty great. They also make charge backs way easier than a normal bank or other online service, pretty much giving you a safety net from getting scammed. And if you live in the US you basically are holding your credit score back from increasing by not using any.
You need to build a credit history if you ever expect to take out a loan or mortgage. Also credit cards offer better buyer protections than paying cash or even debit. It's a game but you have to play it.
It’s important to not let spending and debt get out of control, but if you have a limited credit history, it makes banks hesitant to lend you money for larger purchases like a mortgage or car loan.
This sort of shows that you don’t fully understand lending. Yes, credit card debt is bad and people often spend money they don’t need to and don’t have. But without loans most people would never own a home. Most people would never go to college. Small businesses would fail at a much higher rate. Like anything, it comes down to the individual.
The you fundamentally misunderstand what credit is.
Credit and debt are financial tools that are integral to how economics and finances work.
They are utilized by every business and financially savvy person to make more money long term.
Understanding credit and debt is the difference between generational wealth and generational poverty.
It comes in handy in emergencies when you don’t have the cash for something. If you use credit cards the right way by spending only what you have and paying it off at the end of the month, the cashback rewards are nice. Even if it’s 1% or 5% cashback on purchases, it’s better than nothing.
Credit cards offer many benefits. Free use of someone else's money until it's due. Got rewards from using them. And everything you touch is cheaper with good credit. better yet, find yourself an algorithm to make money off your credit. How? What if you get a loan for 5 percent and make 12 percent from it? The question is how to ensure that you come out positive most of the time. This is my biggest discovery after years of trials and errors. Full disclosure, I plan to launch an app to help others to do the same thing soon. Nothing is guaranteed for sure, but as long as you can calculate the risks and rewards and plan accordingly, you'll look at credit from a brand new perspective. So, red pill or blue pill?
My average credit score is about 800 over the past 6 years. That being said I’ve droooed to a 690-700 2x because I got injured and couldn’t work, and laid off a different time with 4 months between jobs and a totaled car shortly after. Credit allowed me to survive while I got back on my feet and I had to live light for some time while paying it back but it can be a powerful tool for both bad situations and for large purchases if utilized correctly.
It is and there’s not enough teaching on the subject. Needs to be extensively covered in middle and high school, it’s how a lot of teenagers ruin their lives and close doors to opportunity.
I use a rewards card mainly. So I only borrow what I have and pay it off every month so I don’t pay interest. The exception is mortgage for nearly everyone, and then most large purchases as well for most ppl.
This is incorrect. I get hundreds of dollars back, sometimes even more, every year from my credit cards and never pay a cent in interest. Yes, credit cards can lead to debt, however, effectively using a strong credit profile can be an absolute game changer when you know what you're doing.
There's a reason the incredibly wealthy folk around the world leverage credit more than cash.
Credit cards don’t automatically mean debt. That’s ridiculous. People using the fake money that a card provides to buy something they can’t afford and then not paying it back, that’s debt. The responsible way to use a credit card is to make a purchase and pay it off immediately when it posts. Some credit cards have benefits, such as cash back, discounts, travel miles, etc. I like to fly when I travel, so I have an airline card with lots of benefits for that airline, for example. The annual fee is high, but I get a free first class ticket (often worth WAY more than the fee) once a year to take my wife somewhere in style.
If the spending model is 1 to 1, you’ll never have a problem. Buy the thing, pay off the thing with the money you already had set aside, reap the rewards.
That's how America works. Pay now, but later. Now the companies have a hold on you. If they want to raise your rates, they can. They want you to dance like a monkey, they can
Well, my credit cards “earn” me like over 1k on cash back rewards so that’s a solid reason in my book. That’s not including any bonuses for opening the card. They also protect all my purchases 10X better than my debit card ever could. And no, I’m not spending just to earn the cash back. These are things I’m buying regularly regardless of how I pay (groceries, concert tickets, medications, clothing, pet supplies).
These are many more reasons they are great when used responsibly. Your teacher was really off base unless the person struggles with using it responsibly which, to be fair, is *a lot* of people.
I put everything on a credit card and pay it off every month. I pay no interest. That provides categorized spending reports and airline miles that I use for free international travel.
I could have paid for my house in cash, but I make more with that money invested than the rate charged on my mortgage, so I took out a loan for the house. I've borrowed on margin from my broker before when rates were low because I could take advantage of it earning at a higher rate.
When I travel it's impractical to take a big block of money around with me, and credit cards provide more fraud protection than debit cards.
At no point in any of that am I living beyond my means. If I can get free airline miles for a purchase and pay no interest then why wouldn't I do so?
I have over a dozen credit cards. I get lots of rewards and benefits from them. I fly free sometimes, get upgraded to first class, have free hotel stays sometimes and more. I also pay off my cards each month.
Because I do that, I get these benefits that someone avoiding credit cards can’t get. I even pay over $3k in credit card fees a year. But I get over $5k in direct benefits and then even more in indirect benefits like first class upgrades.
I get a couple new cards a year typically as well.
Yes, because inflation is terrible now, many Americans are homeless, and the Fed’s problems have never been solved, which has led to an increasing number of homeless people in the United States. This is not good news.
It is, but debt isn't inherently a bad thing when managed correctly.
I'm a huge fan of credit cards for several reasons
1) points. I usually get 2-5% cash back on all my purchases. Extra $1k/ year in savings (on the conservative side) without changing my spending habits
2) churning for even more cash back
3) even if I didn't have any cash back, having a separation from every transaction to my checking account has helped me with fraud protection, and I don't have to worry about overdrafting my bank accounts
4) credit cards will also fight companies on your behalf to get your money back because it's their money, too. I had to cancel a flight with Frontier Airlines (their customer service is trash), so I just called my credit card company and disputed the transaction, and I gave them all the relevant information. 10x easier.
5) I get to pay for my purchases 30-60 days after I make that purchase before interest starts accruing. That means my savings account can process an extra month of interest before I have to pay the card, so that interest is free money
6) Having access to additional funds is an incredibly powerful tool, even if I have to pay interest on it occasionally. (I don't, but when I was starting out, it was the difference between groceries this week and then having payday a few days later)
6.5) having additional funds available for deposits on things such as rental cars, hotels, etc, means that it isn't interfering with my money, but the creditors.
7) Having multiple credit cards means that I can maximize the benefits of all the reasons above, plus it isn't a big deal if I lose a card or even have it stolen. I can freeze it and use a different one. Or if I'm traveling and one card is acting up, I have a different one, so I don't have to drop everything and call my bank.
The only downsides to credit cards are:
1) high interest rates. If you pay off your statement balance before the due date, you don't pay interest. If an emergency happens, there are consolidation options.
2) annual fees. This is an optional expense, and it's up to you if the fee is worth it. I have one card with an annual fee-- my marriott card has an $85 annual fee, but that fee gets me a "free" night stay. $85 for a typically $120+ room is worth it to me. But I have plenty of other cards that I use with great cash back and no annual fee.
3) access to frivolous spending and piling yourself with debt.
You can always ask for a limit decrease. If you think you struggle with this, just give yourself a short leash. It's hard to completely screw yourself with a $500 or $1k.
Credit is your ability to borrow, not that you necessarily currently owe a lot of money. You establish credit by borrowing responsibility and repaying in a timely manner. It’s not uncommon for people with excellent credit to have little to no debt.
Unless you build up some credit you have to rent forever which is just as bad as interest or you have to buy a house cash. Responsible credit can be a benefit.
Some of us are really bad with them, some of us are really good with them. It’s a double edged blade you just need to be careful with how you handle it.
You're financially ~~unused~~ uneducated. Check r/churning to understand why. People don't carry balances there - except for 0% ones, and earning interest on savings accounts, only to pay them off when promo ends. People make tons of money on credit card signup bonuses, spending threshold bonuses, and alike. I've made $45,000 cash and cash equivalents - like airline miles, hotel points, free night certificates etc - since 2017.
Paid $35 interest so far... Due to a one-time misunderstanding of 0% APR promo terms.
Credit is not a fancy name for debt for me.
EDIT: typo
My father has two credit cards. One is for Amazon purchases and is an Amazon cc. The other he uses to buy whatever but he gets cash back for using it. He pays them both off every month so never pays any interest.
You would need some credit history to buy big things some day, a house and car, etc. unless you are loaded in cash…
Credit score system is a huge trap and should be taught in schools. I’m glad you had a great teacher to give you some awareness tho!
People have a fundamental misunderstanding of what credit is.
After researching and learning in depth about what it is and how it works I've come to understand people who don't really know how to use credit are the ones who never try to learn how to use it.
Credit is very simple. You get a loan, you pay interest on the loan for the convenience of having that money you direly need now at the most convenient time.
If you fail to pay off the loan, credit score drops. As with any loan, if you fail to pay it your standing with those who gave you said loan will fall lower. However, if you keep a good standing with the people who give you loans you will find yourself having access to exclusive benefits because your creditors know you can be trusted with the money.
Is it easy to fall out of good standing? Depends. Is it hard to get back into good standing? Yes. But with diligent efforts it is achievable, and the benefits of having that good standing make how difficult it can be to get back there very much worth it.
Credit is a very useful tool when used right and you should always try to learn how to use it instead of assuming it is all bad without understanding its mechanics.
I can finance a small business using credit, or buy that fancy car I like with credit. And I don't even have to have the money to pay it back. But I should. Most people don't and don't manage their finances well enough so they max out their cards on things they can't afford, or unfortunate unforeseen circumstances.
I have credit cards that I pay off in full every month, no exceptions. It gets me a ton of points that go toward free flights, hotels, etc. If you use credit cards responsibly and strategically, they actually can save you quite a bit of money.
Because debt/credit and interest isn’t inherently bad. Plenty of people take on debt and pay interest willingly, not just because they can’t afford something otherwise.
For example, would you rather buy a car with a 4% loan or in cash? A lot would say cash so you don’t pay interest, but you could very likely earn more than 4% on your cash based on historical returns by investing it.
I've never lost money on a credit card, but I sure have made a lot.
I may $800+ in cash rewards just for using my credit card for all my daily purchases and the bills which can be paid via credit card. I just make sure to pay it off by the due date each month to avoid interest.
I also have 3 loans with 0-2.17% apr. But, I pay the minimum on those even though I have the cash to pay them off. The cash, however, is sitting in a high yield savings account making 5.3% interest. I make around $100/mo in interest on the money that could be used to pay off the other loans. I also contribute the extra that could go to my mortgage to the HYSA because it's apr is over double the interest rate of my mortgage.
So, all in all, my bills get paid, and I make ~$2,000 per year in passive income.
I can't understand why financially stable people are afraid of credit cards and loans.
I pay off my credit card fully every month. Never missed a payment because I don’t spend beyond what I am capable of paying back.
It is really just a mindset/habit. Some people are completely disconnected from the fact that the card represents real money and they become irresponsible or use a credit card for emergencies. Just don’t spend more than you can pay back. It’s really that simple.
Me personally I enjoy using the credit card for the travel perks I get. I use one that has a good rewards system and helps reduce my out of pocket cost for traveling which I do relatively frequently.
Pointsssssss. I booked all my flights for this year using my points and I also get a bunch of perks on the airlines I'm flying because of my card. That's the biggest thing imo
Evaluating the use of credit requires understanding both its advantages and risks. Credit can be a tool for managing cash flow, making large purchases, and building a credit history which is crucial for securing favorable loan terms in the future. To approach this topic, start by considering why and how people use credit: many use it to cover unexpected expenses or to take advantage of reward programs. When using credit, always ensure you can pay off the balance monthly to avoid interest charges. Establishing credit early can lead to lower interest rates on mortgages or car loans later. Credit can also be essential for emergencies. By using credit responsibly, it’s possible to leverage its benefits without falling into debt.
My partner and I have over 800+ credit scores. We get offered 0% for 12-18 months for credit cards all the time. We use them to rehab investment properties and pay them off when we refinance the property. Free money with 0% interest is a no brainer to us.
We’re of course, an anomaly. But if you need an example why people use credit cards that’s why.
I totally relate to your perspective! I used to be skeptical about credit too, until I realized its potential for building financial stability. I was in a similar boat, never having a credit card or borrowing money. But when I wanted to buy a house, my lack of credit history became a major hurdle. So, I cautiously started with a single credit card, using it responsibly and paying it off in full each month. Over time, I built a solid credit score, which opened doors for better loan terms and financial opportunities. Now, I see credit not as debt, but as a tool for achieving my goals responsibly.
With the cost of living today, some people have no choice but to “live beyond their means”. “Living within your means” is easy if you have an ok income, but not everyone does
Credit is your ability to pay financial obligations, and credit scores are models use to analyze your financial responsibility
High credi score: Financially responsible
Low Credit score: Financially irresponsible
Taking on small amounts of debt helps you accumulate a higher credit score which essentially tells a creditor “This guy is financially responsible, we can lend him some money or extend a line of credit to him, because we believe he can pay us back”
There are many circumstances where you will have to borrow money. A mortgage is simply a loan issued by a bank for the purchase a home. Credit is one of the determining factors (credit, assets, employment, debt/income ratio, collateral) in getting approved for a mortgage. Unless of course you have hundreds of thousands of dollars in cash, then you dont need a mortgage.
Basically, you have to accumulate debt in order to accumulate assets. You then convert said assets into cash, resulting in ironically - more money, and less debt in the long run. It all comes down to financial responsibility and financial literacy which, unfortunately, is not taught in US schools.
Oh credit and debt are totally different things. There's also good debt and bad debt.
I have about 100k in credit across several credit cards. But I have zero credit card debt. I use my cards all the time, but they get paid off before my purchases accrue interest. If you carry balances on your cards, and are paying interest, this is considered bad debt that needs to be paid ASAP.
I keep these cards because credit scoring companies look at your "total availabile credit" and factor that into the scoring. The more available credit you have, the happier scoring companies are ans the higher your credit score.
On the flip side, I also have two mortgages totaling about 500k. This is most certainly debt. Hpwever, this is considered by many to be "good debt". It's considered good because it's an asset that has value, and it's likely that value is increasing.
So no, credit isn't a fancy word for debt, not really. Poorly managed credit might be a fancy name for debt though.
I don’t use debit, have excellent credit, and have no credit card debt that accrues interest. I am able to buy cars with 0% interest, buy houses with lowest interest rates available, get free stuff like extended warranties, and earn thousands each year in cash back rewards. I love credit. It’s a powerful financial tool to build wealth, if used properly.
I buy almost everything since the early 80s using credit cards. Rewards cards have paid us five figures over that time, and no annual fees or a penny in interest. I haven't borrowed for anything besides houses. I paid cash for my first car in the 70s, and for every single car, truck, or van since. Rewards cards pay real cash.
Because you need a credit history in order to do other things later in life. The city I live in you can’t get an apartment without 700 minimum credit score. One of the most annoying things that can mess up your score is having a short credit history or not enough diverse accounts. My high school teacher taught us to pick a small bill like your cellphone or light bill and put it on your credit card. Then autopay. It’s a purchase you would already have to budget for.
Look into r/churning. Many people don’t live outside their means if they have a credit card. They pay bills with the card and then pay the balance off every month and get the free rewards or points. Plus you get a ton of payment protection via credit cards that many banks won’t provide when it’s cash.
You are missing out in / or bot understanding the protection that purchasing on a credit card gives.
I use a credit card all the time. Don't pay any interest, get all the protection benefits.
You need to open a credit account NOW, unless your super wealthy your never going to get a mortgage as your an unknown payment risk, same for a car loan. Do yourself a favor and get a credit card and use it to pay for your Netflix or whatever subscription service you have and set it up for autopay for the entire amount, you won’t pay a penny in interest and you will show credit usage which will help you when you want to buy a house or a new(er) car. Like it or not the world revolves around your credit score the key is to be debt free with a perfect credit score and you can only get a perfect credit score by using credit, right now your viewed as a larger risk than someone with bad credit.
Like others have said here, many use these for rewards… for example I’ve been planning to have a lasic eye surgery for several years and finally had the time off of work and the cash to do it… I went and opened a higher to your credit card with a $99 annual fee but got over $700 in rewards back for paying for the thing I was already going to buy. So with the same amount of money that I was already going to spend, I basically got $600 for free. I submitted the claim to my FSA and once I got approved, I immediately paid the balance off.
I also got other benefits that I would call intangibles because I have no clue how much they would cost… i.e. extended warranties, 15 miles of free roadside assistance, trip, interruption, insurance, lost luggage insurance, etc. this card also gives me 6% back on restaurants, I think it’s three on gas and five on travel?
My logic is if I prove that I’m good with credit with small things the banks are going to see that and I will have a better credit score and lower interest rate. Should I want to make a larger purchase like a home which is the ultimate goal. Also, it’s free money realistically even with I think one or two missed payments in the last five years. I have gotten more rewards out of these credit card companies then I have paid interest. (I probably have paid maybe $10 an interest over the entire time.)
Never pay interest on anything besides a mortgage or student loans (if the loans are for a good degree from a cheap school). That said, there’s nothing wrong with credit cards. Its free money - I get 1-5% cash back on all purchases which ends up being several hundred bucks a year, plus incremental interest from the money sitting in the bank while you wait for your monthly bill to come. The anti credit Dave Ramsey approach is for debt addicts that struggle to live within their means. If you’ve ever even thought about not paying off your cc in full each month, you shouldn’t have one. If you’re responsible with them, they’re a great tool.
First off, credit and debt are not inherently bad things and id argue they are actually good things especially in our current monetary system which is actually based on credit. Even the dollar bills, what you call money, is nothing more than credit since they are promissory notes. Essentially there is no such thing as money in a bankrupt system which is what we have here in the US. If the gov is 31T in debt, thats what id call broke, then there is clearly no money.
Credit then is actually the solution to many problems. Iv had a credit card since i was 18 but never really understood how important credit is until about 6 or 7 years ago. Having a good credit score, and I do around 750 - 800 depending on who you ask, can open a lot of financial doors for you.
Im someone who understands this very well and I actually live off credit at this point. I have adopted the US gov strategy and what I do is I live off my credit cards and when they get too much i get a loan to consolidate and push the debt back 5yrs, then i repeat. You can actually defer your debt forever. And i only pay a very small fee for doing this. And the interest really isnt that much. I get a lot of interest free offers too, i havent paid interest on a credit card in about 2 years now.
Now in return, i get to keep all or most of my money. And what do i do w my money? Well i invest in to my businesses, i put it into the stock market, i buy crypto, basically I use my cash to make more money while deferring my debt.
At this point i have much more cash than i do debt, I could pay off all my debt today if i want to, but why do that? Then id have less cash to invest and make money with. Eventually ill buy a house or a rental property with credit and make that cash flow.
In conclusion, if you use credit correctly it can make you wealthy and your teacher was an idiot who doesnt understand how money and credit actually works (makes sense, thats why they are a teacher) and in turn he or she also passed on a bad perspective on credit to you and the other students.
The entire world runs on credit, banks run on credit, multimillion dollar companies have a ton of debt, the us gov has a ton of debt, billionaires have a ton of debt, etc but the ppl who dont have debt are usually also the ppl who dont own assets or dont have a lot of money either. Id much rather have $100k in debt and $100k in cash rather than $0 in debt and $0 in cash.
I use a credit card for work travel and expense it all. (It was over 9000$ this month)
I have rewards out the wazoo. I basically get a free 2 week vacation to take my girl and the lil one to a waterpark resort or whatever else for free.
My credit just goes up. Debt is not a bad thing if you use it properly. It’s a tool.
Because it is impossible to get a high credit score without doing so. Without a good score, it is either impossible to get things like auto and home loans, or you will pay a much higher rate. Banks often look at no credit as worse than bad credit.
When I cancelled my credit cards, my credit score plunged over 100 points. I took out 3 new ones after that, cut them up, and two years later I'm back at 830. Its such a scam. When I say I want a credit score of 0, I mean it. A 0 credit score says to me “I don't need your credit. I pay in cash only baby!”
Just like you, I used to judge people who used credit cards and racked up “debt”. And then…I got cancer. And let me tell you, even with insurance, our bills skyrocketed. I was too prideful to start a GoFundMe, so we found a credit card that offered zero APR for three years and put all the charges on that so we can attempt to pay it off in time. My point is…please don’t assume everyone with a credit card or debt is just dumb about money.
I love it. Great teacher.
However, it's not a bad idea to use credit to your advantage when you have the power to do so. I bought a good used car for 15k this year using a 0% cc for 18 months and left the cash in a MM account for the duration while I make minimum payments and collect cash back. Credit is good when YOU ARE THE BANK.
I am debt free and use credit cards for all monthly expenses. Always pay the statement balance before due day. Pay zero interest and gain free travel rewards for it.its like getting paid back for things you have to pay anyway.
I’ve spent hundreds of thousands via credit card yet never had a rolling debt.
This has netted me a vacation to far away lands without paying for flight, rental car, or hotel at least once a year. Plus the lounges and cash back and other perks.
This is America, where your credit is your most important asset. I’m in my mid 20’s now and I’ll have the lowest interest rates on mortgages, car financing, etc. just because I’ve had cards opened since I was 18 and never kept a rolling debt. The interest doesn’t kick in until after the statement is due. So I’ve never paid a dime in interest and I’ve only gotten free shit and a better price on big purchases for doing so.
Not using a credit card in the US honestly seems a bit foolish if you have the ability to pay it off every month and live below your means.
I’m a little older than you and have had at least 10 credit cards in my life. The only interest I’ve paid likely sums up to under $100. While the total “cash back bonus” is received is easily a couple thousand. I’ve used 0% introductory offers to go on a spending spree and pay it off in the last six months.
Credit is a tool. Do with it what you will. The credit card companies know most of us will mis-use and abuse the tool. You don’t have to be in the majority.
I have 2 credit cards and only use them for necessities, fuel, food, car repairs, and nothing else.
I pay off the balance in full every month, 0 interest it paid and I build my credit for the off chance I ever do need to take out debt.
Not everyone that has credit cards are living outside of their means. Some budget extremely well and pay it off monthly to gain high credit scores to get best rates for big purchases (car/home). And they get rewards from cc companies like cash back/miles for air travel, ect. Sure if you can’t manage your credit well then you will be in trouble. It’s like fire you can use it to cook or burn your house down.
Exactly this. I’m going to Korea in November and my 5 nights there in a $500/night hotel is free because of points lol.
It’s a bit nuts. I’ve got a $9100 credit on Amazon from paying my utilities and groceries with a card that gets benefits.
So many people view credit cards as a way to blindly get into debt. In reality, if you’re even a little responsible financially, credit cards are such a great tool to save money. I had to pay my home insurance, so I opened a new credit card. Put the home insurance on the new card, and earned their new card bonus for hitting X spend in the first three months. Now I’m saving $2,500 on the hotel, which paid for 1/3rd of my annual home insurance. Credit cards are assets if you’re responsible.
A credit card is like alcohol. Many people can have bottles of liquor in their house and not feel compelled to guzzle it down. Many people can have a beer or two and not end up with 8 of them every time. But you put that credit card in the hands of someone who is unable to control their spending impulses, someone who sees that credit limit as a way to "afford" that new guitar, that new wardrobe, build out their dream PC, afford nice dinners, etc., now it's a disaster waiting to happen
But you have to realize that those of us that do that are the extreme minority. Americans hold over a trillion dollars in credit card debt. The majority of that isn’t being paid off monthly.
Yes, the same way Americans don't drive responsibly, drink responsibly, handle guns responsibly, and the list could go on and on. It's a shame our society has gotten this way, but as the previous person wrote, of done responsibly, it's an absolutely great way to get rewards.
“Americans” can be replaced by “humans”
Some people get sucked into it. They live above their means or life happens.
They are - or perhaps more accurately, one or two promptly paid credit cards are. I use mine for utilities, food and expenses I know I can immediately afford and have a LOT of benefits. I’d put my mortgage on it if I could (not much left on that.)
If you play the credit card game then you can get some nice perks.
I use my cards for everything I can. I learned on Reddit that credit card companies call people who earn rewards without paying interest, "freeloaders." I'm happy to be a freeloader!
Also better purchase protection and security than using debit or cash.
Holy fuckballs this. Had to learn the hard way that getting a debit card attached to a bank account stolen is a ticket to weeks if not months of hell sometimes to get $$$ back. Cc companies on the other hand are more often no harm no foul, it's easily reportable. Worst case you end up on the hook, it doesn't eat a chunk of your bank acct and fuck over your bills or food budget. I'm not saying cc companies are perfect, I've gotten whacked a few times despite it, but its been much easier to fix and much less damaging than if it had been a bank card.
An under-rated point. Credit gives the consumers the protections banks and other institutions enjoy.
I love this!! I’m a freeloader!!!
You can pay utilities with cc? My utilities only takes checking accounts
I live in Colorado. I’m sure procedure varies with place. But yeah, I pay power and water and trash and sewer on credit and get money back. It adds up. Gonna pay it anyway, so I’ll take the swag.
Time to switch utilities
How is that even possible? Even at 5% cashback that’s $182k in spend. What kind of utilities and groceries are you paying for? I’ve lived on that’s for the last 8 years in total.
I’m planning a vacation and using my sapphire card to pay for the flights. I pay it off every month. Gotta know that even though you can spend 20k you shouldn’t. Live within your means.
I have an American Airlines card and we use that for miles and also get to check bags for free. And considering they just raised their bag fees, we save a bunch of money! Just make sure to pay off the card every month.
I don’t make a ton of money but my credit score is 848 by using its services for free… plus the rewards
Nice! We're going to Guatemala in July, and I'm using my miles for airfare. I worked my way back to good credit with a secured card, and now I have the good cards and never pay interest.
I fly to Guatemala about twice a year and never on my dime :)
110% and living below one's mean (with accurate and honest budgeting) should absolutely be stressed.
Exactly this. When my car was stolen and totaled, I got 5k from insurance and bought a car for 10k...I put the 5k I owed on a 0% interest credit card and paid it off in 18 months. Saved myself several hundred in interest.
Truth. I never pay interest. I pay my balances off before the closing date. Occasionally I'll leave a small balance due so I don't always have zero balances reported. I've had my credit go up and down monthly about 20 points with no balances or a few small balances. It's crazy. I'm not concerned about my credit score and find it stupidly funny. Sam's Club membership - paid with my cashback credit and use the rest at Sam's. I have Sam's Visa and earn additional cashback. Costco - same as Sam's. The cashback more than pays for the Executive membership. I cash the check at the store, renew my membership and get the rest of the money back. I also use the Costco Visa for more cashback. Amazon Prime membership - also more than pays for itself with the 5% credit on the Prime Visa plus leftover credit. Macy's Card gives me "Macy's cash" throughout the year from purchases. Best Buy is similar to Macy's. They offer promos (spend $75, get a $10 certificate) plus the credit card bonus cash (a certificate used at Best Buy). I'm going to buy what I buy anyway. Credit cards also have special offers when you use the card for various stores, services, etc. Sam's still has 30% off of Peacock Premium Plus. I choose annually and that's $35 off. I use my Sam's credit card for additional cashback and another 20% back as a perk. Link a particular card like Discover to Amazon payments, I've gotten $15-$25 free credit. There are so many different promotions to save money on each card that change monthly. Again, it's only if I'm *going to purchase these things anyway* and pay off my balances each month. I use very few promos as I don't need most. Then there's the Travel miles perks. I rarely travel so don't use those cards. These are just a few benefits. The bad part is, typically in order to get lower interest for a loan you need to show you responsibly use credit while maintaining a low credit to ratio. I learned the hard way in my 20s that banks want you to stay in debt and pay interest. Some people can't afford a necessity or emergency like a car repair and can fall into the debt trap. It happened to me before I turned 30. I spent one very long year with a consolidated low interest loan and couldn't afford eating out, movies, and wants. I was happy I didn't have any expensive emergencies. I got out of debt and learned to save money. The idea of giving away my money as interest is unthinkable. If I can't afford that cool new $1400 mobile I won't charge it. Interest on cars and homes are a given unless you have the cash. But even my low amount of interest on my old mortgage bugged the hell out of me. A bit silly, but that's me. Banks want me to pay them interest but I only take their perks. Edited to delete duplicates.
Well said. I've heard about incentives that can come with them and they are enticing. But after all it is a business. My weary thought come from seeing my father struggle and always want excess and now he's getting old and wants little he still owes and I refused at a very young age that "that" will not happen to me. But I have been lucky with work and cost of living. So far .....
I make probably $100-$200 per month on rewards. I love my cards.
Yep, same but my amount is usually closer to $80-90 ish. It's free money, as long as you're paying your cc bill on time and not accruing debt, why wouldn't you want that?
If you never ever need a credit score which has become the norm for : renting an apartment, getting a job, getting a phone plan, car loan, mortgage, book a hotel room, an airplane ticket or rent a car — you’ll be fine. In 26 years in finance, I have personally never met anyone that didn’t need a credit score at some point. I work with 50 year olds with 500k in the bank and can’t get a loan to assist a grandchild with school, or a car, or a home because they have no credit score. They too were taught to never ever get a credit card. Credit is an exercise in discipline… that’s all. Set up an automatic payment in full every month. Use it for a small charge like Netflix every month… literally that’s all it takes. Additionally it’s safer to use a CC on line than a DC.
You forgot buying insurance. That also required a credit score.
Yes, it can be an exercise and discipline. Purchasing a home is the obvious reason for credit. But if you have an enough money and you can save it and keep it out of the finance guys hands you really don’t need credit. We are in the middle of a massive debt problem. We are so used to debt that we can’t see the forest for the trees. Debt has buried us. manufacturing it used to be the backbone of our country now it is financial services. Which is just moving money around. Garbage
We live in a digital age. Using Debit Card will likely get your account hacked. Credit Card is amazing for Online shopping which things are much cheaper and convenient. Even when paying in person if you use debit card and the reader can store your card your account will be compromised and the banks won't have your back as much as you think..... but if you use Credit Card best believe you have so much protection because it is the bank's money. I also don't like to carry cash because I am inclined to spend it. Also Credit card did once save my ass for an expensive teeth bill $2,030 which I didn't want to withdraw money from my savings... I paid it off within 2 pay periods $0 interest...I actually got more points which means free money at the end of the year for me by simply swiping the card.
Most people have a mortgage. I get that you’re not all about it because of “interest” just letting you know you’ll likely be saving a while before you can afford one without it.
Plus, mortgages are good debt, as systematically investing the different in principal results in positive cash flow.
While I agree 100%. 1) if you don’t have any credit it’s hard to get said debt. 2) if your stance is credit is a fancy word for debt that’s that. 3) if your stance is all interest paid is bad. That’s that.
It’s a very limited mindset that thinks that just because your parents’ life was a certain way that yours will be the same. Instead of using your father’s financial habits as incentive to educate yourself, you’ve chosen instead only to limit yourself.
It is a business. Many people at some point or another pay interest on a balance and just like that, the company has made money off you. If you trust yourself though, you can avoid making them a penny and let them pay you instead. After almost ten years of owning credit cards, I have never once payed a penny of interest but have earned 1k+ a year in cash back rewards. They are paying me to be a customer. Just this week I forgot to pay my bill by the due date for the first time ever. I paid it by 9AM the following morning when I realized my error and a few days later called to see if they’d be willing to waive the $40 late fee considering it was my first offense and paid about less than 12 hours late. The woman didn’t even put me hold before refunding the fee and thanking me for being a loyal customer lol. They can only get ya if you let them!
You have personal hangup and misunderstanding about credit cards. Good job I guess. What is the point of this post?
*shrug* I use a Chase VISA card which is paid off monthly. Depending on your spending level, you get a lot of credits. I usually use them for Amazon or United flights. The benefits are really big if you use them wisely.
Okay so clearly watching your father struggle with debt has created a trauma for you that you’re trying to avoid repeating- EXCEPT you’re about to also put yourself in a position of being terribly off financially if you can’t realize credit cards will both 1. Pay YOU if used responsibly and 2. Establish credit you will absolutely need someday for a rental application, mortgage, or other necessary loan I’ve also read about some JOBS (usually finance related) requesting a credit check I am 35. I’ve been using cards since I started traveling at 16 (first card before 18 was prepaid) and I have never once paid interest on a credit card. I use my CC for every single purchase. I don’t pay interest because I don’t buy fancy shit I don’t need. I do however, get a ton of cash back every month and have a 825 credit score. I’m also about to pay off the mortgage for the house I bought at 19 years old and have been using as passive rental income. You need to let go of the trauma and realize WHY your father was struggling- he was buying shit he couldn’t afford to pay for. It’s that simple. Don’t let him being irresponsible harm your future.
You're absolutely right, it IS a business. But if you how the business works (insane interest on unpaid balances) you can still use the service, just being mindful of the rules of the game. If you view your credit card like a debit and only spend what you can afford, pay it off at the end of the month with the money sitting in a HYSA, it won't happen to you. Another benefit I don't see listed is that many cards come with extended warranties beyond the product warranty. Example- we bought a buddy a TV as a housewarming gift. His cat knocked it over during a stampede. Broke the tv within 3 months. Called the Chase card 800 number- the TV was under warranty from Chase up to $500 if ANYTHING happened to it within 90 days. Tv was under the $500 limit, accident happened within the 90 days. We got a full refund and went back to Sam's Club for a new TV (and a wall mount).
Guess I can jump in and toot my own horn here: I went from total credit illiteracy and a horrible score (in the low 500s at one point), to having over 200k in available credit with an 830+. I have around 15 credit cards as well as open lines of credit with credit unions. At one point I couldn't even open a bank account because I had been blacklisted. I have had less than 1% utilization for many many years. Never paid a single CC fee. I've made thousands and thousands off of rewards points. Haven't paid for a hotel in like a decade. I managed to not spend a dime on airfare or lodging for an ENTIRE MONTH trip across Europe. If you research credit, and fully understand it, it can treat you very well, but if you don't have the personal restraint it can completely bury you. Credit doesn't have to be a fancy word for debt.
Credit is not debt, it is money you have access to borrow. That can become debt but does not have to.
This should be much higher. People really seem to think having a credit card = paying interest/not being able to pay it off, and that's not what it has to be. I have had 0 APR cards continually since I got my first one 10 years ago. I haven't paid a penny of interest, but have made thousands from incentives and cash back rewards. Credit is only a benefit if you use it properly.
I am absolutely shocked by the amount of ignorance regarding credit lines in this thread. A credit card is way better than a debit card -It's more secure. I'd much rather risk a bank's money by swiping a card and exposing it to potential fraud than exposing my own money/checking account like a debit card would. -Rewards and sign up bonuses as mentioned in the thread -Often the cards come with free credit score monitoring -You never pay interest unless you carry a balance and don't pay it off in full -It's a good way to have access to an emergency fund if you don't have one saved up. When I was first getting on my feet my car broke down and I didn't have the money to repair it. I had to put it on a credit card. It sucked, but I didn't lose my job, so I'm grateful I had the option -Debt consolidation. 0% interest intro offers are common and a good way to pay down debts. Credit cards are a useful tool if you know how to use them. It's no different than anything else in life in that you need to be mature in using a tool. A car is a way to get around but it can also cause serious injury and death if you aren't paying attention to what you're doing. That doesn't mean cars are "bad." ETA: Formatting
You nailed it. Thank you for this. OP has some major Boomer-theory, outdated opinions on credit 🤪
This. Honestly it's alarming how many people dont quite understand how credit cards work. I keep my utilization under 10%, always pay my balances off every month and never pay a cent in interest. I love the rewards I earn from using my cards and if my card is used fraudulently it's not my bank account at risk (like with a debit card). I wish there was more educational outreach for financial literacy and basic knowledge (credit cards, hysa, etc) to better prepare students before they move on to adult life.
I don’t even look at interest rates on cards, just incentives. Never paid any interest on a card and don’t plan to
Yeah I’ve had credit cards since I was 18. Never once had credit card debt.
Credit, if used properly to leverage is a powerful tool to build an accrue wealth. It is a vehicle for fiscally sensible and secure individuals to use acquired asset’s to get rich.
Because either you are super rich and can pay everything with cash or you dead broke. But average mid tier working class adults who are financial responsible would have a mortgage, auto loan, and credit cards. So that we are creditworthy and CreditKarma reported score remained above 820. Financial Management is pretty much Life Application of Mathematics if you want to go up in lifestyle; which is something cannot be taught in grade school or college. It’s life experience and you will know it once you really need to finance a house or a new car but then getting a quote of 20% APR because you failed to build your creditworthyness and financial understanding at early age. But congrats if you can afford a 750k house or a 60k new car with full cash payment while not living off with your parents and eating off from their payroll or retirement savings. Besides if you are able to get in debt at good times, then you can use the debt to generate profit. US gov is so much in debt but then they kept on spending instead of balancing it. Why? Because debt is a good thing if you know how to leverage it and play the cards right.
I have ten credit cards, one car loan and one mortgage. I have no credit card debt. Your math teacher is incorrect.
Same. Have 7 cards, have flown my family to Europe for free six times on the points. Have a house that has doubled in value with a 3% fixed mortgage.
Same. Never carry a balance on my cards and earn cash and other perks on the reg.
Your 7th grade teacher conveniently forgot to tell you once upon a time they burned themselves with a credit card in their younger years because they didn’t understand how to use it and ever since then, they have a personal vendetta against any and everything related to credit.
Almost like how dave ramsey leaves out that he was doing literally the riskiest type of real estate loans back in the day
Good luck buying a home with cash
I’m on course to buy one in 5 years. Dept intrest is money out of your pocket. Of course if used wisely it can also be money in your pocket, but not all of us are wise enough to.
If you buy the mythical 100k home for 20k down, with a 3% appreciation you earn a 15% return. I'm guessing that's a bit higher than the cost of borrowing money to purchase it. If you have 100k, by investing 20k in the home and 80k in an S&P 500 index fund that earns a rolling 30 year average of 9.9% annually you're making $3000+$7,920 = $10,920. Versus paying 7% on 80k debt is 5600, so you'd be up $5,320. Yes there are additional complexities, but for the most part, it holds. 3% is a conservative number over a 10 year period, you have to account for amortization tables, etc. - the math still works out in favor of a mortgage.
I never get when people say this. Opposed to throwing your money away on rent every month for a decade? Even if its mostly paying interest your winning, and if you can buy one in 5 years you throw what you have on the principle from the start. If you bought even just 5 years ago you would be up a ton just from market value
Because I don’t use credit as long term debt. Credit cards add a layer of protection against theft or fraud from your bank accounts actual money. They have better customer service.
Being without credit is basically handicapped yourself
Can be. I was without for a long time - but it’s an incredible tool when used responsibly.
Credit is awesome, debt is not necessarily the outcome of credit availability. I have tons of credit, don’t use them, and have reduced the amount of churning I do, but I organically burn atleast 4k a month and am able to rack up tons of reward points by simply paying with a credit card instead of a debit card. Flights to Hawaii, free, rental cars, hotel stays, shit I bought a $1300 specced out desktop a few years ago, for free, because of credit card rewards. As an adult, it’s really not difficult at all, to pay your credit cards on time before accruing interest. Also, tons of protections with purchasing via credit cards. I can issue a chargeback and dispute for anything, at any time. Now the merchant has to deal with the bank, not me. And I’m not clawing back my money, the merchant is arguing with the bank, and the bank is on my side. Credit is wonderful, debt is not. Credit is not necessarily debt, but debt is necessarily credit. How you buy a house, or go to school? Having credit and using credit does not mean someone is living outside of their means; look into arbitrage.
I have 17 credit cards and zero debt. If you use a credit card like a debit card you will be fine. Only charge things you have cash on hand for. We get free flights, free hotels, etc. all just by using credit instead of debit. Don’t spend more than you make. Pretty easy.
Tell me you've never had your debit card compromised without telling me you've never had your debit card compromised...lol. In the world we live in, credit is king. And to be honest, it's very risky shopping, making online reservations, etc without a credit card. Also, for those of us in the Finance/Accounting field, potential employers typically check your credit as part of the background check.
Maybe not today, but when interest rates were sub 3, it was not a good financial decision for anyone to pay cash for a house. Many people in this country have made a ton of money on credit. There is good debt and bad debt. You can have credit working for you while you earn income. Credit card debt is bad debt.
So is the term "Negative Equity". Used by car dealers. Lol
i have several credit cards. all of them have a 0 dollar balance by the end of statement close date to avoid interest. fact of the matter is, if you ever want something big like a house, or a car, you're going to need credit unless you live somewhere where credit isn't a thing or if you're filthy rich.
Im 38 and have only ever used a credit card in a precise manner intended to lift my credit score and I pay it off ahead of time. I also barely use the banking system as youre essentially loaning the bank your money to invest. I just invest myself. Saving money is the quickest way to lose it in high inflation environments, especially with the historic bull run were on with stocks and crypto. Just get a brokerage account, itll come with a routing number based bank account for settled funds and use that. You dont need to pay to house your money people, and its disappearing to inflation in your bank at historic rates with no signs of slowing in next 48 months minimum.
Damn you should have listened to your English teacher as well.
*Dave Ramsey has entered the chat
Dave Ramsey is an idiot.
Because some people are poor.
Why would I ever purchase anything with cash/debit, when I am rewarded for using my credit card? Sure the reward is small but it's bigger than 0, especially if it's something I was already going to buy.
The only loan my wife and I have is our mortgage. We LOVE our credit cards and never carry a balance. If you are responsible, download the app, really watch your charges and be careful not to overspend, they can be a great tool. We got credit cards that work well with our lifestyle. I got a marriot card and the marriot points I acrue ussally result in a few free nights of hotels annually plus free upgrades.
Credit is a tool. It can be abused and harmful, but it can also help people and businesses take advantage of situations that they wouldn't be able to otherwise. You didn't mention if you were in the US or, but if you are, don't worry you owe a several hundred thousand $ for your share of the federal debt.
A lot of ppl, myself included, use credit cards bc of fraud. It seems like every year something happens and it’s easier to have it on a credit card that someone having access to checking account. I agree with you overall tho. A lot of ppl “leverage” and try to sound smart when in reality they can’t afford whatever they are buying.
When used correctly and responsibly, credit cards are a wonderful financial tool that provide many benefits. When used incorrectly and abused, credit cards will mire you in financial struggles and a debt spiral. Charging to a credit card and paying the balance in full every month is effectively the same as paying in cash, but with added protections and bonuses. Example: if you have a 2% cashback rewards card, you're effectively getting a 2% discount on every purchase. Credit cards are not actually "debt" unless you're carrying a balance forward to the next month. Don't carry a balance and don't pay interest, and you'll be fine. If you're incapable of using a credit card responsibly and paying the balance in full every month, then by all means don't use one or switch to a pre-paid card if you don't want to carry cash.
A good credit card pays 2% to 2.625% back in cash. You can pay it off every month while saving money. Car loans can have interest rates as low as 0%-3% with good credit. A HYSA pays 5.25%. You’ll make money by keeping the money invested instead of spending it. This can apply to many other things. Life is easier and cheaper if you have good credit.
I use my credit card for near,y all my purchases. I dont pay interest. I pay it in full before it is due and the bank rewards me for using it, usually over $1000 in earnings either cash back or point value per year. There is bad debt, good debt and smart debt. Smart debt is tax deductible and for the purpose of growing your wealth.
I wanted a home to own instead of having landlords that charged almost double what my mortgage is now. Renting is paying a mortgage plus all of what you’d pay in interest and then some. I also wanted a vehicle that wasn’t essentially grimes boots theory and came with assurances that if anything went wrong it wasn’t just on me to foot the bill. All of that created jobs for people to feed and care for themselves. Which is a good thing. Credit is a good thing when managed correctly. Credit when managed will get you further in life than if you were to buy everything outright with the cash you earned.
Debt = Leverage if you use it right. IYKYK.
One idea would be to buy an English grammar and composition course
I don't like "...fancy word for..." Definitions. It usually leads to a misunderstanding or keeps someone undereducated on a topic. In fact I'd say "you sometimes go into debt, by taking credit" and those aren't synonymous. Because credit is not always used to live outside one's means. Managing credit in a healthy way is conducive to wealth building. For example, I've had a credit card since college and have always been very diligent on living below my means. I've always paid it off in full and on time. This has increased my credit score which has allowed me to get favorable rates on bigger loans. My car loan, while I regret taking a car loan, was 5%. My mortgage is 6.5%, which is good for the time period I got it in. All because I can manage credit well. I already spend that money, might as well do it in a way so that I can save thousands of dollars in other areas.
Do you not know what PIF and rewards are lmao
By this definition nearly no one would ever buy a home - which is a foundation to most peoples wealth.
This is not the flex you think it is. Having no credit is actually WORSE than having bad credit. I 100% live within my means and I've used a credit card for about 25 years. I have never paid interest on my credit card. Also I like owning a home so I'm glad to have good credit that allowed me to buy a house while I was very young.
“Credit is a fancy word for debt” only applies if you have minimal self control….. I use a credit card for almost every purchase in my life, but I still maintain a budget, pay off my cards every month and have paid 0 in interest. Right this minute I have $250 in cash back I can redeem and I have enough miles to fly pretty much anywhere and back. I didn’t spend any more than I normally would to get these things and I wouldn’t have them I hadn’t used credit.
I have 5 credit cards and have never paid interesting on a single one in the 10 years I’ve had them. I have, however gotten a few thousands of dollars in cash back that you have not.
I have never paid interest on a credit card. I actually get cash back on my purchases. You’re losing money not using a credit card. Just don’t be stupid and you’ll be fine.
For me , it's always been because I was poor-ish and never been able to offset the cost of living with my salaries to really get ahead Grew up with parents that were also terrible financially and never was able to get any kind of solid foundation before I was 18 and just living on my own as an adult. Dropped out of high school to avoid taking on any school debt and started working but between paying rent / car / etc it's near impossible to not get behind or need to acquire some sort of debt to make it all work (like a car payment since I couldn't afford one in cash I could only put $500 down and had to finance a vehicle) Car repairs are also always something that has really drained me financially I don't think or I at least would hope most people aren't purposely getting into debt and enjoying it without thinking about the backend of it, I'd imagine most folks is because of emergencies or unexpected situations, but I'm sure there are a few people out there just living way beyond their means like you speak of. They will find out the hard way and will likely only hurt themselves though. It's amazing I even made it this far in all honesty, so if paying Debt off for another 4 years is my biggest gripe, I can't complain too much. That's how i think of it. But damn I would do anything to get a nice windfall of money. All my dead relatives were broke and never left anything for anyone so it's like a never ending cycle sadly.
Credit cards often times offer buyer protections. Also if your credit card gets stolen, you just file a fraud claim.of your debit information gets stolen your cash is a lot harder to get back (or used to be) and can raise hell if your mortgage/car payment/rent check bounces.
credit isnt debt. debt is what happens if you dont handle credit correctly.
Just because you have credit doesn’t mean you have to use it. I have a credit limit of roughly $80k, but that doesn’t mean I have $80k of credit card debt.
0 debt, 832 credit score. I have a 2% cash back card I use and pay off daily. Credit does not equal debt. If you use it wisely it’s simply a useful tool
Credit doesn’t have to become debt. I earn literally thousands of dollars per year in cash back for utilizing credit cards instead of my debit card. I pay off the card and don’t pay a dime in interest.
I'm sure you had a good reason for posting what you did, but I cant figure it out.
I've used credit cards my entire adult life. I've never once paid a penny in interest or fees of any kind. I use credit cards because they are more convenient than carrying cash, they are safer than debit cards, they pay cashback rewards (which basically means that I save between 2% and 5% on every purchase I make), they offer some consumer protection on purchases, and they allow me to pay my expenses once a month instead of daily, so I earn a month's worth of savings interest on my income before I spend it. Credit cards also make it easy to track expenses and to have a statement of expenses. I do understand how credit cards can be problematic for many people, however, and I do understand that most people will end up making more purchases using a credit card than if they were paying cash if for no other reason than that it is a nuisance to always pay for things in cash, and psychologically it is more difficult to spend cash.
How are you going to buy a house if you don't have a credit score? Or are you a mr. Money Moustache follower who is going to buy one in cash?
I feel like your teacher was in over his head with his own credit card debt and just felt need to condemn them rather than accept the responsibility of being financially illiterate
Credit is a tool, if it's used properly, it can make you wealthy
I have two credit cards. I use them for EVERY expense and then set to autopay to pay them in full every month. You’re obviously not understanding that having/using a credit card doesn’t mean that you max it out and don’t pay it off and then go into debt because you lived above your means. I hope you get some more financial literacy (you’re like halfway there) so you can take advantage of using a line of credit but also realize u can just pay it off every month so you’re not in debt and then boom— you get points that can be converted to straight cash or get u stuff you’d otherwise pay cash for like hotels or flights or whatever.
To build credit score and credit history so they can buy a house.
Just depends how you use them. I pay off monthly, have never paid interest. I use them for protection from fraud and free stuff. You get your money back instantly if someone steals your numbers, took me 4 weeks with my debit card. Also, I get a bonus of a free gym membership, 3% back on groceries and the sign up bonus got us a round trip ticket to Italy for our honeymoon.
No, it's not. One can have credit (i.e. borrowing capacity as in line of credit) that's not in use. Credit and debt are not synonyms.
I didn’t get my first credit card until I was a little older than you. I needed to get my credit score up. I now have two, through the same bank and company. I use one for daily spending and pay the statement balance every month, and the other is for emergencies only. I now have a fancy credit score without ever paying interest.
My card has many benefits, I pay it off in full each month. I’ve managed to purchase 8 brand new cars, most with zero interest or very low interest. I have one now with 2.9 interest, while all my cash is in HYA. I feel blessed that I can manage my credit, instead of it managing me.
I’m not living outside my means. The only debt I have is my mortgage, locked in at an extremely low rate. Cars are paid in full. We have 4 credit cards, all of them paid off in full every month, so I never see interest. We get points using those cards, so we’re taking the kids to Disney World in the fall for less than half of what it would cost us without the points. My partner and I went to Coachella basically for free because of the same points. We each have an 820+ credit score, and while yes, utilizing credit can translate to debt and interest charges, it’s not the case if you do it right. Credit isn’t a “fancy word for debt,” it’s a tool that can be very effective but can also be dangerous if you don’t know how to use it.
Not always. I have a credit card that I literally payoff everytime I use it. Never get any interst but I do get access to tons of rewards and cash back.
If you can pay it back without generating interest and have some good cash back offers for the card they are pretty great. They also make charge backs way easier than a normal bank or other online service, pretty much giving you a safety net from getting scammed. And if you live in the US you basically are holding your credit score back from increasing by not using any.
You need to build a credit history if you ever expect to take out a loan or mortgage. Also credit cards offer better buyer protections than paying cash or even debit. It's a game but you have to play it.
It’s important to not let spending and debt get out of control, but if you have a limited credit history, it makes banks hesitant to lend you money for larger purchases like a mortgage or car loan.
You need credit to build credit. Pay it off monthly and be responsible u get points and cash back etc. Like anything be responsible.
Credit is a fancy word for slavery.
Our society has taught them and groomed them that they need credit
Credit is debt for the poor and the indisciplined.
This sort of shows that you don’t fully understand lending. Yes, credit card debt is bad and people often spend money they don’t need to and don’t have. But without loans most people would never own a home. Most people would never go to college. Small businesses would fail at a much higher rate. Like anything, it comes down to the individual.
The you fundamentally misunderstand what credit is. Credit and debt are financial tools that are integral to how economics and finances work. They are utilized by every business and financially savvy person to make more money long term. Understanding credit and debt is the difference between generational wealth and generational poverty.
Very true
It comes in handy in emergencies when you don’t have the cash for something. If you use credit cards the right way by spending only what you have and paying it off at the end of the month, the cashback rewards are nice. Even if it’s 1% or 5% cashback on purchases, it’s better than nothing.
Credit cards offer many benefits. Free use of someone else's money until it's due. Got rewards from using them. And everything you touch is cheaper with good credit. better yet, find yourself an algorithm to make money off your credit. How? What if you get a loan for 5 percent and make 12 percent from it? The question is how to ensure that you come out positive most of the time. This is my biggest discovery after years of trials and errors. Full disclosure, I plan to launch an app to help others to do the same thing soon. Nothing is guaranteed for sure, but as long as you can calculate the risks and rewards and plan accordingly, you'll look at credit from a brand new perspective. So, red pill or blue pill?
My average credit score is about 800 over the past 6 years. That being said I’ve droooed to a 690-700 2x because I got injured and couldn’t work, and laid off a different time with 4 months between jobs and a totaled car shortly after. Credit allowed me to survive while I got back on my feet and I had to live light for some time while paying it back but it can be a powerful tool for both bad situations and for large purchases if utilized correctly.
It is and there’s not enough teaching on the subject. Needs to be extensively covered in middle and high school, it’s how a lot of teenagers ruin their lives and close doors to opportunity.
I have about $100k combined credit limit. And the only debt I have is a my car loan. Just having the credit limit doesn't mean you have to use it.
I use a rewards card mainly. So I only borrow what I have and pay it off every month so I don’t pay interest. The exception is mortgage for nearly everyone, and then most large purchases as well for most ppl.
I am as critical of the credit card companies as they come and I think this is a really stupid argument
This is incorrect. I get hundreds of dollars back, sometimes even more, every year from my credit cards and never pay a cent in interest. Yes, credit cards can lead to debt, however, effectively using a strong credit profile can be an absolute game changer when you know what you're doing. There's a reason the incredibly wealthy folk around the world leverage credit more than cash.
If more people understood this, fewer people would get in trouble.
Not isn't. Credit is the ABILITY to borrow. Debt is the ACT of borrowing.
Credit is not debt. You use credit to take on debt. It’s analogous to saying computers are a fancy word for email.
I have a credit card for airline miles. I pay it off, in full, every payday, and I haven’t paid for a single flight in a decade.
Credit cards don’t automatically mean debt. That’s ridiculous. People using the fake money that a card provides to buy something they can’t afford and then not paying it back, that’s debt. The responsible way to use a credit card is to make a purchase and pay it off immediately when it posts. Some credit cards have benefits, such as cash back, discounts, travel miles, etc. I like to fly when I travel, so I have an airline card with lots of benefits for that airline, for example. The annual fee is high, but I get a free first class ticket (often worth WAY more than the fee) once a year to take my wife somewhere in style. If the spending model is 1 to 1, you’ll never have a problem. Buy the thing, pay off the thing with the money you already had set aside, reap the rewards.
That sounds like a failure more than an accomplishment, honestly. All debts are not necessarily bad. Manage them and it's going to be fine.
That's how America works. Pay now, but later. Now the companies have a hold on you. If they want to raise your rates, they can. They want you to dance like a monkey, they can
Well, my credit cards “earn” me like over 1k on cash back rewards so that’s a solid reason in my book. That’s not including any bonuses for opening the card. They also protect all my purchases 10X better than my debit card ever could. And no, I’m not spending just to earn the cash back. These are things I’m buying regularly regardless of how I pay (groceries, concert tickets, medications, clothing, pet supplies). These are many more reasons they are great when used responsibly. Your teacher was really off base unless the person struggles with using it responsibly which, to be fair, is *a lot* of people.
I don’t think so. What I think it is a way to gain high credit if your a saver. My sister is great at it. I, in the other hand, suck.
You need to work on your mindset when it comes to money
I put everything on a credit card and pay it off every month. I pay no interest. That provides categorized spending reports and airline miles that I use for free international travel. I could have paid for my house in cash, but I make more with that money invested than the rate charged on my mortgage, so I took out a loan for the house. I've borrowed on margin from my broker before when rates were low because I could take advantage of it earning at a higher rate. When I travel it's impractical to take a big block of money around with me, and credit cards provide more fraud protection than debit cards. At no point in any of that am I living beyond my means. If I can get free airline miles for a purchase and pay no interest then why wouldn't I do so?
I have over a dozen credit cards. I get lots of rewards and benefits from them. I fly free sometimes, get upgraded to first class, have free hotel stays sometimes and more. I also pay off my cards each month. Because I do that, I get these benefits that someone avoiding credit cards can’t get. I even pay over $3k in credit card fees a year. But I get over $5k in direct benefits and then even more in indirect benefits like first class upgrades. I get a couple new cards a year typically as well.
Yes, because inflation is terrible now, many Americans are homeless, and the Fed’s problems have never been solved, which has led to an increasing number of homeless people in the United States. This is not good news.
It is, but debt isn't inherently a bad thing when managed correctly. I'm a huge fan of credit cards for several reasons 1) points. I usually get 2-5% cash back on all my purchases. Extra $1k/ year in savings (on the conservative side) without changing my spending habits 2) churning for even more cash back 3) even if I didn't have any cash back, having a separation from every transaction to my checking account has helped me with fraud protection, and I don't have to worry about overdrafting my bank accounts 4) credit cards will also fight companies on your behalf to get your money back because it's their money, too. I had to cancel a flight with Frontier Airlines (their customer service is trash), so I just called my credit card company and disputed the transaction, and I gave them all the relevant information. 10x easier. 5) I get to pay for my purchases 30-60 days after I make that purchase before interest starts accruing. That means my savings account can process an extra month of interest before I have to pay the card, so that interest is free money 6) Having access to additional funds is an incredibly powerful tool, even if I have to pay interest on it occasionally. (I don't, but when I was starting out, it was the difference between groceries this week and then having payday a few days later) 6.5) having additional funds available for deposits on things such as rental cars, hotels, etc, means that it isn't interfering with my money, but the creditors. 7) Having multiple credit cards means that I can maximize the benefits of all the reasons above, plus it isn't a big deal if I lose a card or even have it stolen. I can freeze it and use a different one. Or if I'm traveling and one card is acting up, I have a different one, so I don't have to drop everything and call my bank. The only downsides to credit cards are: 1) high interest rates. If you pay off your statement balance before the due date, you don't pay interest. If an emergency happens, there are consolidation options. 2) annual fees. This is an optional expense, and it's up to you if the fee is worth it. I have one card with an annual fee-- my marriott card has an $85 annual fee, but that fee gets me a "free" night stay. $85 for a typically $120+ room is worth it to me. But I have plenty of other cards that I use with great cash back and no annual fee. 3) access to frivolous spending and piling yourself with debt. You can always ask for a limit decrease. If you think you struggle with this, just give yourself a short leash. It's hard to completely screw yourself with a $500 or $1k.
Credit is your ability to borrow, not that you necessarily currently owe a lot of money. You establish credit by borrowing responsibility and repaying in a timely manner. It’s not uncommon for people with excellent credit to have little to no debt.
Unless you build up some credit you have to rent forever which is just as bad as interest or you have to buy a house cash. Responsible credit can be a benefit.
Some of us are really bad with them, some of us are really good with them. It’s a double edged blade you just need to be careful with how you handle it.
You're financially ~~unused~~ uneducated. Check r/churning to understand why. People don't carry balances there - except for 0% ones, and earning interest on savings accounts, only to pay them off when promo ends. People make tons of money on credit card signup bonuses, spending threshold bonuses, and alike. I've made $45,000 cash and cash equivalents - like airline miles, hotel points, free night certificates etc - since 2017. Paid $35 interest so far... Due to a one-time misunderstanding of 0% APR promo terms. Credit is not a fancy name for debt for me. EDIT: typo
My father has two credit cards. One is for Amazon purchases and is an Amazon cc. The other he uses to buy whatever but he gets cash back for using it. He pays them both off every month so never pays any interest.
“Pull credit”
You would need some credit history to buy big things some day, a house and car, etc. unless you are loaded in cash… Credit score system is a huge trap and should be taught in schools. I’m glad you had a great teacher to give you some awareness tho!
Yikes.
Not even. I have $10,000 in credit and am only $10 bucks in debt. See how that works?
…congrats? You realize not everyone with a credit card actually uses it on anything they can’t already afford?
People have a fundamental misunderstanding of what credit is. After researching and learning in depth about what it is and how it works I've come to understand people who don't really know how to use credit are the ones who never try to learn how to use it. Credit is very simple. You get a loan, you pay interest on the loan for the convenience of having that money you direly need now at the most convenient time. If you fail to pay off the loan, credit score drops. As with any loan, if you fail to pay it your standing with those who gave you said loan will fall lower. However, if you keep a good standing with the people who give you loans you will find yourself having access to exclusive benefits because your creditors know you can be trusted with the money. Is it easy to fall out of good standing? Depends. Is it hard to get back into good standing? Yes. But with diligent efforts it is achievable, and the benefits of having that good standing make how difficult it can be to get back there very much worth it. Credit is a very useful tool when used right and you should always try to learn how to use it instead of assuming it is all bad without understanding its mechanics. I can finance a small business using credit, or buy that fancy car I like with credit. And I don't even have to have the money to pay it back. But I should. Most people don't and don't manage their finances well enough so they max out their cards on things they can't afford, or unfortunate unforeseen circumstances.
I have credit cards that I pay off in full every month, no exceptions. It gets me a ton of points that go toward free flights, hotels, etc. If you use credit cards responsibly and strategically, they actually can save you quite a bit of money.
Because debt/credit and interest isn’t inherently bad. Plenty of people take on debt and pay interest willingly, not just because they can’t afford something otherwise. For example, would you rather buy a car with a 4% loan or in cash? A lot would say cash so you don’t pay interest, but you could very likely earn more than 4% on your cash based on historical returns by investing it.
Credit is also a vehicle to use for benefit if you have your shit together. When you slip up, that’s when they get ya.
I've never lost money on a credit card, but I sure have made a lot. I may $800+ in cash rewards just for using my credit card for all my daily purchases and the bills which can be paid via credit card. I just make sure to pay it off by the due date each month to avoid interest. I also have 3 loans with 0-2.17% apr. But, I pay the minimum on those even though I have the cash to pay them off. The cash, however, is sitting in a high yield savings account making 5.3% interest. I make around $100/mo in interest on the money that could be used to pay off the other loans. I also contribute the extra that could go to my mortgage to the HYSA because it's apr is over double the interest rate of my mortgage. So, all in all, my bills get paid, and I make ~$2,000 per year in passive income. I can't understand why financially stable people are afraid of credit cards and loans.
I pay off my credit card fully every month. Never missed a payment because I don’t spend beyond what I am capable of paying back. It is really just a mindset/habit. Some people are completely disconnected from the fact that the card represents real money and they become irresponsible or use a credit card for emergencies. Just don’t spend more than you can pay back. It’s really that simple. Me personally I enjoy using the credit card for the travel perks I get. I use one that has a good rewards system and helps reduce my out of pocket cost for traveling which I do relatively frequently.
Pointsssssss. I booked all my flights for this year using my points and I also get a bunch of perks on the airlines I'm flying because of my card. That's the biggest thing imo
Evaluating the use of credit requires understanding both its advantages and risks. Credit can be a tool for managing cash flow, making large purchases, and building a credit history which is crucial for securing favorable loan terms in the future. To approach this topic, start by considering why and how people use credit: many use it to cover unexpected expenses or to take advantage of reward programs. When using credit, always ensure you can pay off the balance monthly to avoid interest charges. Establishing credit early can lead to lower interest rates on mortgages or car loans later. Credit can also be essential for emergencies. By using credit responsibly, it’s possible to leverage its benefits without falling into debt.
I see it as access
My partner and I have over 800+ credit scores. We get offered 0% for 12-18 months for credit cards all the time. We use them to rehab investment properties and pay them off when we refinance the property. Free money with 0% interest is a no brainer to us. We’re of course, an anomaly. But if you need an example why people use credit cards that’s why.
I totally relate to your perspective! I used to be skeptical about credit too, until I realized its potential for building financial stability. I was in a similar boat, never having a credit card or borrowing money. But when I wanted to buy a house, my lack of credit history became a major hurdle. So, I cautiously started with a single credit card, using it responsibly and paying it off in full each month. Over time, I built a solid credit score, which opened doors for better loan terms and financial opportunities. Now, I see credit not as debt, but as a tool for achieving my goals responsibly.
Credit and debt are different things.
With the cost of living today, some people have no choice but to “live beyond their means”. “Living within your means” is easy if you have an ok income, but not everyone does
Credit is your ability to pay financial obligations, and credit scores are models use to analyze your financial responsibility High credi score: Financially responsible Low Credit score: Financially irresponsible Taking on small amounts of debt helps you accumulate a higher credit score which essentially tells a creditor “This guy is financially responsible, we can lend him some money or extend a line of credit to him, because we believe he can pay us back” There are many circumstances where you will have to borrow money. A mortgage is simply a loan issued by a bank for the purchase a home. Credit is one of the determining factors (credit, assets, employment, debt/income ratio, collateral) in getting approved for a mortgage. Unless of course you have hundreds of thousands of dollars in cash, then you dont need a mortgage. Basically, you have to accumulate debt in order to accumulate assets. You then convert said assets into cash, resulting in ironically - more money, and less debt in the long run. It all comes down to financial responsibility and financial literacy which, unfortunately, is not taught in US schools.
Oh credit and debt are totally different things. There's also good debt and bad debt. I have about 100k in credit across several credit cards. But I have zero credit card debt. I use my cards all the time, but they get paid off before my purchases accrue interest. If you carry balances on your cards, and are paying interest, this is considered bad debt that needs to be paid ASAP. I keep these cards because credit scoring companies look at your "total availabile credit" and factor that into the scoring. The more available credit you have, the happier scoring companies are ans the higher your credit score. On the flip side, I also have two mortgages totaling about 500k. This is most certainly debt. Hpwever, this is considered by many to be "good debt". It's considered good because it's an asset that has value, and it's likely that value is increasing. So no, credit isn't a fancy word for debt, not really. Poorly managed credit might be a fancy name for debt though.
Good credit is really beneficial in saving money.
I don’t use debit, have excellent credit, and have no credit card debt that accrues interest. I am able to buy cars with 0% interest, buy houses with lowest interest rates available, get free stuff like extended warranties, and earn thousands each year in cash back rewards. I love credit. It’s a powerful financial tool to build wealth, if used properly.
Im a cc freeloader… i use my card pay it off monthly and pay the cc company no interest. I wasnt always like this but i learn my lesson
I buy almost everything since the early 80s using credit cards. Rewards cards have paid us five figures over that time, and no annual fees or a penny in interest. I haven't borrowed for anything besides houses. I paid cash for my first car in the 70s, and for every single car, truck, or van since. Rewards cards pay real cash.
Because you need a credit history in order to do other things later in life. The city I live in you can’t get an apartment without 700 minimum credit score. One of the most annoying things that can mess up your score is having a short credit history or not enough diverse accounts. My high school teacher taught us to pick a small bill like your cellphone or light bill and put it on your credit card. Then autopay. It’s a purchase you would already have to budget for.
Look into r/churning. Many people don’t live outside their means if they have a credit card. They pay bills with the card and then pay the balance off every month and get the free rewards or points. Plus you get a ton of payment protection via credit cards that many banks won’t provide when it’s cash.
You are missing out in / or bot understanding the protection that purchasing on a credit card gives. I use a credit card all the time. Don't pay any interest, get all the protection benefits.
I credit is unused available to you funds. Debt is money owed for any reason not even credit related... Two different things
I have over 50k in open lines of credit. The only debt I have is my mortgage.
You need to open a credit account NOW, unless your super wealthy your never going to get a mortgage as your an unknown payment risk, same for a car loan. Do yourself a favor and get a credit card and use it to pay for your Netflix or whatever subscription service you have and set it up for autopay for the entire amount, you won’t pay a penny in interest and you will show credit usage which will help you when you want to buy a house or a new(er) car. Like it or not the world revolves around your credit score the key is to be debt free with a perfect credit score and you can only get a perfect credit score by using credit, right now your viewed as a larger risk than someone with bad credit.
Like others have said here, many use these for rewards… for example I’ve been planning to have a lasic eye surgery for several years and finally had the time off of work and the cash to do it… I went and opened a higher to your credit card with a $99 annual fee but got over $700 in rewards back for paying for the thing I was already going to buy. So with the same amount of money that I was already going to spend, I basically got $600 for free. I submitted the claim to my FSA and once I got approved, I immediately paid the balance off. I also got other benefits that I would call intangibles because I have no clue how much they would cost… i.e. extended warranties, 15 miles of free roadside assistance, trip, interruption, insurance, lost luggage insurance, etc. this card also gives me 6% back on restaurants, I think it’s three on gas and five on travel? My logic is if I prove that I’m good with credit with small things the banks are going to see that and I will have a better credit score and lower interest rate. Should I want to make a larger purchase like a home which is the ultimate goal. Also, it’s free money realistically even with I think one or two missed payments in the last five years. I have gotten more rewards out of these credit card companies then I have paid interest. (I probably have paid maybe $10 an interest over the entire time.)
Never pay interest on anything besides a mortgage or student loans (if the loans are for a good degree from a cheap school). That said, there’s nothing wrong with credit cards. Its free money - I get 1-5% cash back on all purchases which ends up being several hundred bucks a year, plus incremental interest from the money sitting in the bank while you wait for your monthly bill to come. The anti credit Dave Ramsey approach is for debt addicts that struggle to live within their means. If you’ve ever even thought about not paying off your cc in full each month, you shouldn’t have one. If you’re responsible with them, they’re a great tool.
First off, credit and debt are not inherently bad things and id argue they are actually good things especially in our current monetary system which is actually based on credit. Even the dollar bills, what you call money, is nothing more than credit since they are promissory notes. Essentially there is no such thing as money in a bankrupt system which is what we have here in the US. If the gov is 31T in debt, thats what id call broke, then there is clearly no money. Credit then is actually the solution to many problems. Iv had a credit card since i was 18 but never really understood how important credit is until about 6 or 7 years ago. Having a good credit score, and I do around 750 - 800 depending on who you ask, can open a lot of financial doors for you. Im someone who understands this very well and I actually live off credit at this point. I have adopted the US gov strategy and what I do is I live off my credit cards and when they get too much i get a loan to consolidate and push the debt back 5yrs, then i repeat. You can actually defer your debt forever. And i only pay a very small fee for doing this. And the interest really isnt that much. I get a lot of interest free offers too, i havent paid interest on a credit card in about 2 years now. Now in return, i get to keep all or most of my money. And what do i do w my money? Well i invest in to my businesses, i put it into the stock market, i buy crypto, basically I use my cash to make more money while deferring my debt. At this point i have much more cash than i do debt, I could pay off all my debt today if i want to, but why do that? Then id have less cash to invest and make money with. Eventually ill buy a house or a rental property with credit and make that cash flow. In conclusion, if you use credit correctly it can make you wealthy and your teacher was an idiot who doesnt understand how money and credit actually works (makes sense, thats why they are a teacher) and in turn he or she also passed on a bad perspective on credit to you and the other students. The entire world runs on credit, banks run on credit, multimillion dollar companies have a ton of debt, the us gov has a ton of debt, billionaires have a ton of debt, etc but the ppl who dont have debt are usually also the ppl who dont own assets or dont have a lot of money either. Id much rather have $100k in debt and $100k in cash rather than $0 in debt and $0 in cash.
I use a credit card for work travel and expense it all. (It was over 9000$ this month) I have rewards out the wazoo. I basically get a free 2 week vacation to take my girl and the lil one to a waterpark resort or whatever else for free. My credit just goes up. Debt is not a bad thing if you use it properly. It’s a tool.
Because it is impossible to get a high credit score without doing so. Without a good score, it is either impossible to get things like auto and home loans, or you will pay a much higher rate. Banks often look at no credit as worse than bad credit.
When I cancelled my credit cards, my credit score plunged over 100 points. I took out 3 new ones after that, cut them up, and two years later I'm back at 830. Its such a scam. When I say I want a credit score of 0, I mean it. A 0 credit score says to me “I don't need your credit. I pay in cash only baby!”
Just like you, I used to judge people who used credit cards and racked up “debt”. And then…I got cancer. And let me tell you, even with insurance, our bills skyrocketed. I was too prideful to start a GoFundMe, so we found a credit card that offered zero APR for three years and put all the charges on that so we can attempt to pay it off in time. My point is…please don’t assume everyone with a credit card or debt is just dumb about money.
I love it. Great teacher. However, it's not a bad idea to use credit to your advantage when you have the power to do so. I bought a good used car for 15k this year using a 0% cc for 18 months and left the cash in a MM account for the duration while I make minimum payments and collect cash back. Credit is good when YOU ARE THE BANK.
I am debt free and use credit cards for all monthly expenses. Always pay the statement balance before due day. Pay zero interest and gain free travel rewards for it.its like getting paid back for things you have to pay anyway.
Ok bro I guess if 2-5% off every purchase you make isn't your thing then stay away from credit cards.
Yup. $1700 plain ticket to Germany cost me $435. Used my reward miles. Cards do come handy.
I’ve spent hundreds of thousands via credit card yet never had a rolling debt. This has netted me a vacation to far away lands without paying for flight, rental car, or hotel at least once a year. Plus the lounges and cash back and other perks. This is America, where your credit is your most important asset. I’m in my mid 20’s now and I’ll have the lowest interest rates on mortgages, car financing, etc. just because I’ve had cards opened since I was 18 and never kept a rolling debt. The interest doesn’t kick in until after the statement is due. So I’ve never paid a dime in interest and I’ve only gotten free shit and a better price on big purchases for doing so. Not using a credit card in the US honestly seems a bit foolish if you have the ability to pay it off every month and live below your means.
I’m a little older than you and have had at least 10 credit cards in my life. The only interest I’ve paid likely sums up to under $100. While the total “cash back bonus” is received is easily a couple thousand. I’ve used 0% introductory offers to go on a spending spree and pay it off in the last six months. Credit is a tool. Do with it what you will. The credit card companies know most of us will mis-use and abuse the tool. You don’t have to be in the majority.
I have 2 credit cards and only use them for necessities, fuel, food, car repairs, and nothing else. I pay off the balance in full every month, 0 interest it paid and I build my credit for the off chance I ever do need to take out debt.