Topic: Does Using a Credit Card Demonstrate Financial Literacy? - page 3. (Read 836 times)

Financial responsibility is definitely about how one should manage one's budget but it is also necessary to gain experience to be aware of financial responsibility and shape it. Of course, the use of credit card debt or loan debt will vary from person to person but the important point is how a person will control this debt. For example, buying a car with a credit card can be considered a luxury expense but making money by using this car and paying off the car's debt depends entirely on the financial intelligence of the person. On the other hand, as I mentioned in my previous comment, the correct use of credit card helps to purchase luxury consumer products more easily. For example, paying in installments in a currency with a high inflation rate actually helps to obtain the purchased service or product at a lower cost and helps to obtain it more easily compared to paying in installments.

Of course, it is your choice not to have a credit card for the rest of your life and not to think about having one for the rest of your life. Who knows, maybe if you had a credit card you might have been paying credit card debt continuously for years. I think that people who are especially interested in luxury consumer products and who cannot achieve financial control should definitely not have a credit card.

If financial discipline were a human, then it basically would not have been everyone at the same time. It's likely to be only one person. What do I say so? People are born with different traits and raised with different disciplines (different parents and backgrounds); no one was single-handedly born with the ability to use money or manage their financial lifestyle properly. There are people who don't stress about anything in the sense that they are always content with what they have. For instance, if you go to the market and have a budget of things you were supposed to buy, but you see a different one that is more expensive than the one you have in mind to purchase, instead of going for the one you intended to, you decide to go for the costliest one. That kind of attitude is what some people cannot portray, whether they are using a debit card or cash. So, in my opinion, it all depends on the individual. There are some people who will go vaaa with a debit or credit card, and some will not. Some people will also go vaaa with cash, and some will not.

That's right, I'll just add the reasons why a person borrows.

- The person borrows because of an emergency that unexpectedly occurs in their life.
- Borrowing because of luxury or something they want to get that they may not be able to buy with cash, so the loan method is their
  solution.
- The others made it a habit, so as a result, they continue to be buried in debt as time goes on.
- the others borrow to show that they have a credit card, or they are leveling themselves to rich people even though they are not really rich;
  in short, those who try hard or feel rich are not really rich.

So these are just a few of the reasons for borrowers, but at the same time, you must be responsible for paying and don't end up looking like you are the arrogant one when you are the one who owes the debt.

There's nothing wrong with credit cards, it's how people use them that matters. We're currently living in a time with significant social inequality, where the rich keep getting richer, and the poor struggle to make ends meet. In my opinion, credit cards are designed for the financial needs of wealthier individuals, those who have a steady monthly income even if they have high spending lifestyle. entrepreneurs often have substantial monthly earnings, and using a credit card is seen as a convenient and helpful way for them to conduct transactions. Since they have no trouble covering their expenses, those using credit cards can easily pay their bills every month. Given the substantial amount of money they earn, their extravagant lifestyle might only account for 10% or 20% of their total income. So, they're not wrong to use credit cards, are they?

The real issue with credit cards arises when people with relatively small incomes rely solely on a single source of income, which isn't substantial enough. If you're struggling to make ends meet, it's not advisable to use a credit card for everyday expenses. However, it can still make sense to use it for wise financial transactions. Credit card users should understand their own lifestyle and the size of their income. these aspects are interconnected and vital for their financial health.

but that stigma different when we are really into the business field, debt is just a way to grow your business faster, credit card is no exception if taken advantage properly you could get all the benefits of the credit cards in your business, as long as its productive debt it will be fine.
the only problem when people are taking loan just for luxurious stuffs like buying expensive cars, then it will become a problem since they are just giving burden towards their income but if it is debt specifically for business i'm pretty sure it will be quite of a help, imagine you got potential of expanding your profit, but stuck with the capital and equipments, simply use credit card to buy equipments to expand your business, the debt will eventually get settled meanwhile you get massive income increase.

But cash is going to be extint soon since governments are pressuring for card usage nowadays. I visited Poland two years ago, and even street vendors accepted cards for purchases as little as $0.20. You can pay with a card everywhere, and I found it extremely convenient because I didn't have to go to an ATM machine or go through currency exchanges and so on.

Personally, I have both a credit card and a debit card; the OP here is mostly focusing on credit cards. I'm using cards quite frequently, and personally, card usage makes finance management a little easier. You can keep track of your spending without too much effort. However, I do agree that you can easily lose track, especially with credit cards, if you're caught buying things in installments.

Unfortunately, though, the era when cash was king is long gone. You can't make any large purchases anymore because everything must go through the banking system. One way to possibly avoid all this monitoring would be with cryptocurrency cards, which, even though they require KYC (such as Binance's or Crypto.com), your money is still somewhat safe from the eyes of the government.

It all depends on how you use that credit card and what part of the world you're living in.  Here in the United States it's typically pretty important to use credit cards that way you can build credit in case you need to borrow money for things such as a car and a home, which most people need help with.  The problem comes when people get in over their heads and use the card above their means and don't make their timely payments or keep the card paid off.

I wouldn't say that they are financial literate, but perhaps they already know or at least they know someone who might have a bad experience with credit card that they dare not to used or apply for one and would rather used cash instead. And I think that there's nothing wrong with it. At some point in time, majority of us here has a huge credit card debt before we were able to get out of it and promise to ourselves not to go that fair and be responsible when we had credit cards.


But it doesn't mean though that this people are debt free, who knows maybe they got debts from people or bank but not from credit card. So we can't really say for certain that those who doesn't have credit cards are financially literate in my opinion.

If you do have plans on making up some loans like housing loans,personal loans, car loans in the future then building up your credit score would really be the best thing to be done on which having those credit
cards would really be that useful and i do agree into those words above telling about perks and cashbacks or even zero interest if you do tend to buy something on which it is really that a good thing
or having those kind of benefits. As long you do make yourself a good payor or really that a responsible card holder then it would really be just that fine on having these cards.
Wrong things do only happen if you do really just missed out on paying your due date on which it would really be having that accrued interest on which it is really just that normal
but if you do pay up on the right time then it would really be just that fine or something that brings great convenience i should say.

Avoiding debt is a good thing but it's different compared to using a credit card for purchases, if someone uses a credit card doesn't mean they don't have the money to afford it even as basic positive thing credit card gives us protection against while buying something online so if someone used it without authorization you are not liable to pay them back and banks has to bear the loss and also if you are not aware of credit card perks like cashback, reward points, best deals and lot more and the important thing is it will give us good credit score which will benefit in the future when we are in need.

Depends on how you use it. I've seen people subject themselves to crippling debt thinking that these credit cards are free money dispensers that do not bite back. It's also quite possible for you to gain higher credit, and be allowed to enjoy the finer things in life like an approved loan no matter how big that is, and all that stuff, if you're a good paying credit card holder.

It's all in how you carry it really, not about the card itself. Sure, some cards grant more power, some cheap out on features and benefits, but at the core of it all a credit card acts as your passageway to managing money more wisely, cause when you're in the face of money that's accessible whenever you need it, self-control and discipline is what would matter the most.

  Living in debt is energy-draining. Buying stuff we can't afford might provide short-term satisfaction, but in the long run, it will suck our life away. If you can't afford to pay off the full balance of your credit card every single month, that’s enough of an alarm for you to STOP using credit cards! Always live below your means, save and wait until you can afford those expensive things. Simple living is WAY better than a living with financial bondag,  as long as you clear your balance every month. By doing so, your credit rating climbs at the fastest rate, and you often gain more points/incentives/gifts through various programs that the credit card companies are offering today.
    If cash is lost or stolen it is gone. If a credit card is lost or stolen, I am typically not responsible for any fraudulent transactions, and none at all after I can report the card stolen. credit cards are awesome. You certainly don’t have to feel bad about not paying the credit card company interest to borrow their money. Their costs are covered by the transaction fees anyway. Since credit card transaction fees are pretty much built into the prices of everything (excepting the rare cash discount) you may as well get to enjoy the benefits.

There are many advantage and disadvantages to using a credit card. However, I have lived all my life in a country where all we use is debit card so I may not be able to speak from personal experience about using a credit card. What I know is that from where I am from, debt is a bad thing. You do not want to be in debt so we learn to pay for every straight from our bank account using our debt card. We do not see debt as a good thing and no one is applauded for being in debt. In fact the measure of financial literacy is avoiding debt in all its entirety.

I think in such a scenero, one who finally succeeds a make withdrawal after much time spent in the queue might inspire to place financial withdrawal excessively beyond budget with a draftic measures to give a bit gat to the bank in accordance of avoiding such experienced stresses.
Hence, this singular system of having more cash at hand beyond budget could trigger to unnecessary expenses.

I think the answers will really vary on this one. Because there are many people who use credit cards every day but they are still good at managing their finances and can still maintain their financial stability. And on the contrary, there are many people who are in debt even when they don't use or don't even know about credit cards. So I think it all depends on a person's insight and discipline in managing their own finances. Or it will all depend on the different cases experienced by each person. For example, if someone is not good at managing finances and becomes more wasteful when using a credit card, then of course the solution is to stop using credit cards and switch to cash.

I don't have credit card but I use pay later services on ecom sites because with this payment method returns are faster, I pay the accured amount before the due date, it increases my credit score which is extra bonus, I find nothing wrong with it despite in past myself despising credit cards.

Whether literate or otherwise, credit cards are fine as long you pay on time. It might be hard to do so for CC addicts, hence may be financial advisors recommend using cash for payments.

Cash is king. And more private.

Do you remember the 80's and early 90's where having a credit card was a symbol of status and high-class? Now a credit card is a symbol of being in debt.
Taxes/fees paid when you use your credit card are high, and in countries with a lot of devaluation/inflation is getting higher. The majority of people I know is using them only because they don't have the money to make a one-time hard cash payment.

Sure there are some "benefits" like travel points, refund of some taxes, etc., but this only shows that either the fee you are paying for using the card is already high, or the government wants control over the spending of their citizens.

Not entirely because some people who have a credit card also set limits on it just to be on the safer side of impulse buying and debts (cause that's what mostly happens). Meanwhile, for some other people, using cash can be a sign of financial discipline because it's a tangible form of money, hence it makes it easier to physically see and control your spending. Additionally, you can only spend what you have in your wallet and that can prevent you from impulse buying or accumulating debts. However, if used well with discipline, credit cards can be beneficial through cashback, rewards, building a good credit score, and more.

Being in-depth, or being reckless or indiscipline all totally has nothing to do with either cash or credit card payment, as it all boils down to the individual in question, of which both cash and credit card payments all has their advantage and disadvantages, and left for an individual to choose that which is most beneficial to him or her. Because while a person living in a city or town may prefer to use credit cards, someone living in the village may prefer to be using cash for payment of goods and services. Henceforth, the location by which a person finds himself matters a lot.

Note: Being discipline is an inner quality far beyond either credit card or cash

If done correctly, anything could be good but it is true that most people who use credit card seems to face debt in their life. If you use the credit card responsibly while doing some calculation and setting up a budget, then you are fine, you are good to go. You know what you are doing. Credit card is a great way of borrowing money without facing the trouble of doing many paper works and waiting.

Only those people who use it carelessly are in great debt. "I can borrow a bit of money and use it to buy me this and that. I will pay it back in the future when I get money." People with this mindset will always fall for debt. Doesn't matter if those kinds of person are using a credit card or traditional cash. Those who have the tendency to borrow from people and live on that will never be able to come out of it. No credit card, they can always borrow from other people.

But the thing is true. When you are using cash money, you have a better understanding of how much money you are carrying with you and you can afford to use. This way you get a better understanding of your spending and control it according to your budget. While on the other hand people tend to get carried away with credit card.

It is true, but the fact still remains the same. Right person can use it in a right way, while wrong person can use it in a wrong way.