Topic: Credit cards | A scam or a tool? - page 10. (Read 1221 times)
I come from a culture where credits aren't considered a normal thing. You're expected to spend what you have or borrow from friends if you really need the money. If you want something you can't afford, you save money till you can buy it, rather than take a loan. I mean, there are people here who use credit cards, but it isn't very common, and having a debt is considered terrible rather than a part of normal life as I assume it is in the US. So while banks offered me some credit limit, I never use it. I don't want to be in debt, and I do the best I can with the money I own. In my country, we also have these microcredits which are very easy to get, but then the interest rate is absolutely crazy there (easily reaching 10x the amount you borrowed if you're late with payments), and so are collectors that come after you if you fail to pay them everything they say you're supposed to pay.
I am not against it per se. Some authors, like Dave Ramsey, are totally against them.
Credit cards are a very profitable product for financial institutions. I have sometimes wondered how much profit they make from people who end up deferring payments, and therefore paying interest, but it is not information that can be easily found by doing a google search.
Regarding the stores that offer free installments, it is because they know that you end up spending more than if you had to pay cash.
I have a credit card but very rarely use it, to pay for air travel if I go on trips and things like that.
Credit cards are a very profitable product for financial institutions. I have sometimes wondered how much profit they make from people who end up deferring payments, and therefore paying interest, but it is not information that can be easily found by doing a google search.
Regarding the stores that offer free installments, it is because they know that you end up spending more than if you had to pay cash.
I have a credit card but very rarely use it, to pay for air travel if I go on trips and things like that.
What's your thought about credit cards? Do you consider them a banking fraud, just to trick you to spend money you don't have, or a useful tool if used correctly? Do you have one yourself? In my case, as a student, I was issued a university card, which features a low yearly fee but also a considerably low credit limit. However, I often use it to pay bills in interest free installments (Car insurance for instance) and my gas expenses, which provide a decent cashback (I'll fill up my car once or twice a year for free).
On the other hand, there are quite a few shops here that also offer interest free installments, that way, I was able to purchase a bicycle for my girlfriend, when the budget was quite limited.
The trick on credit cards is to use them wisely, not spending more than you can afford, always pay in time, otherwise you'll get a huge interest on your balance, while at the same time, you're building a credit score.
What's your take on this? Are you against credit card usage?
On the other hand, there are quite a few shops here that also offer interest free installments, that way, I was able to purchase a bicycle for my girlfriend, when the budget was quite limited.
The trick on credit cards is to use them wisely, not spending more than you can afford, always pay in time, otherwise you'll get a huge interest on your balance, while at the same time, you're building a credit score.
What's your take on this? Are you against credit card usage?
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