Topic: Does Using a Credit Card Demonstrate Financial Literacy? - page 4. (Read 816 times)

We are talking about "preference" here but forgetting that there are people who have no other choice. Yes, it is obvious that if you spend debt on things that you do not need that's bad, but that's already obvious, doing drugs is also bad, should we tell that too? Some things are just way too obvious and should go without stating.

However, if we are talking about something more serious, like how credit card could be used, then we need to realize that some people are so much in trouble, even without spending on luxury or useless stuff, they just do not make enough to pay for their life misery, and they just find themselves forced to use credit card. That's why credit cards exists, there are things you HAVE TO pay, and maybe you do not have money, so you end up using your credit card for it. That should be something important to note and shouldn't really be a big deal. I think it shouldn't be important on the long run at all and need to be fixed.

I think there is no difference - spending cash or money from a credit card. Both are a waste of money. In order not to be a spender, you need to have a special mindset. For example, my thinking changed a lot after Robert Kiyosaki's book Rich Dad, Poor Dad. I immediately realized that money is not an element of what allows you to buy. And the fact that money is a tool for earning even more money. Therefore, you need to save and save, and if possible, buy bitcoin cheap and sell it for a high price. It was then that I learned the technical analysis of prices, and the concept of Compound Interest.

Exactly correct they are tools much like a chainsaw or a sledgehammer.

Use them properly they are helpful. Use them improperly you are fucked up.

Now I know people that will never use a chainsaw as they feel they will fuckup and hurt themselves.

Me I climb trees or ladders and hack away. I am not a lumberjack but I have felled 50 foot trees safely.

Saved a lot of money doing them myself using good safe methods.

But I know wrong shit can happen using a chainsaw. Just like I know you can fuckup using a cc.

I have use both safely so far.  I just got a card last month.

A 18000 line of credit 12 months interest free and a 900 dollar refund if you charge 6000.

I purchased four miners for 8000. right before price of btc went from 27k to 35k.
I made a threehundred dollar payment and got my 900 refund used that to pay for the card.

so i am down to 6800 debt with 11 months to pay.i the machines do 30 a day 25 after power cost.

So in 300 days they should have earned 7500 which will mean card is paid off. And I own four machines never laying out one dime to get them.

Have you thought about how some family don't have a choice but to live with credit cards all their life? People who will request for debit card will do, it is not about financial literacy. Checked vividly, when people have more basic that are more than their income, then credit card is the only way they can sort out emergency needs because banks know what you earn monthly, and they can easily borrow you than another financial system that may delay you. When a person has a budget deficit, credit cards are inevitable because your net income is less than expenditure, how do you think it is easy to live that life when there are more needs at home?

I don't have the statistics but it is even difficult to see a single person use a credit card except for those that are living life above their pockets. Most often, it is those who have more kids with less pay and have more responsibility at home. The house will be on the mortgage, the kids are there to be paid for school fees, and the wife probably is doing nothing than to help do domestic, the only way out for that time when the income is low is a credit card because you can't avoid basic needs. Banks might be benefiting all from this but this is difficult for some people to ignore.

Handling a debit card is similar to handling cash, but it involves digital currency. This discussion doesn't really compare debit cards and credit cards; it focuses solely on acquiring a credit card and its potential benefits.

According to the definition of 'financial literacy,' it means making wise financial choices. Getting a credit card when you're low on cash or just want to borrow money may not be a wise financial choice for people with limited funds, because the penalties for missing payments are high.

Most of what happens is like that, and that's what I also experienced, but not with credit cards but with the pay later feature which is currently available in many marketplaces, this feature makes us brave enough to shop without first looking at our financial budget, so that when we receive our salary we make dizzy because we have spent more than we should and what's worse is that the high interest means we spend a lot of our money on that.
Credit cards can actually be useful when we can use them carefully and that's what I did when I started a business and needed important tools to buy them with a credit card, so use a credit card only for important things, not to buy unnecessary goods, but what is better is to give up everything, meaning not having a credit card or using the pay later feature which is more damaging because getting it is easier than a credit card, and the interest is more unreasonable than credit cards, and not having both will allow us to refrain from shopping for things that are not important because we will only buy when we have cash.

I am not against with having credit card so long you are being responsible about the use of it.
Because there are so many conveniences that it will provide to you especially in tight situations where you forgot to bring your cash or you are out of cash.
But if you don't want to worry about having debt to these financial companies, much better to use a debit card.
At least, you know you are spending your own money and you don't have to worry about forgetting your due date for your credit card.
Also, it will teach you how to manage your finances without incurring debt to any of these companies.

that is using credit card wisely most of the time some people use credit card to buy luxurious things, in which actually is fine though if the luxurious stuff is some sort of investment that could grow but if its going into some restaurant spending thousand dollar just for eating which next day become feces then its as good as just trapping themselves into the debt.
credit card is good if taken advantage properly but there are many misuse of it.
sometime the fact that credit card, requires us to pay fully at the end of the month to get good credit simply means that its really is just good for holding off payment until sometime and then pay it in full.
which simply means we can afford it in the first place, but delaying it to keep the cash flow from disrupted.

Credit cards are often associated with the wealthy who can pay off their entire balance while benefiting from various rewards and points. However, for those with limited financial means who can only afford to make the minimum monthly payment, it can lead to long-term financial problems, especially if they continue to overspend, resulting in a never-ending balance. Credit cards are essentially tools that offer convenience in spending, eliminating the need to carry large amounts of cash. Therefore, it's essential for individuals to carefully evaluate their financial situations before obtaining one, considering whether it genuinely enhances their financial comfort or merely adds to their debt burden.

In a simplified explanation, while the wealthy enjoy convenience from credit cards, which credit card companies don't profit much from, it's often the less fortunate who are essentially financing the operations of credit card companies, allowing the wealthy to continue benefiting from their services.

Everyone has their own choices and views in assessing something. If the presence of this credit card can harm and endanger yourself because it will only lead you to a bad behavior. then the decision not to use a credit card at all is the right decision.
I personally think that the presence of this credit card is very useful because it can help me when I am in a fairly urgent condition and I think that I have good enough self-control so that in using this credit card I can use it wisely. Another reason why I use credit cards is because I am well aware that I do not have enough savings to be able to answer when I have an urgent need. And maybe I will only stop using this credit card when in time I already have enough savings.

But once you do have a credit card then you could really be able to make up some transactions if you are short in fiat but if you do see that you could be able to sustain yourself without credit card then it would really be just that so fine that you wont really be needing one but for me then it is really that something helpful if you are really just that mindful about paying up your dues. Myself does have that having those past problems about credit cards on which i do really end up on struggling on paying because of having those missed payments on which it did really give out those kind of penalties which ends up on being compounded until you would really be falling into the pit of debt on which getting out would really be never be that easy.

The good thing about on having credit card is that you could really be able to transact things or making those purchases even if you dont have fiat on your pocket which it is really that convenient.
Interest arent really that high though as long you do know on how to pay  your obligations but if not then expect that this is something that would really be happening.
Common sense you would really be needing in terms of handling up yourself into the right path. Spending isnt bad as long you are really that responsible on repaying those dues.
People do usually mess up their lives because of the wrong decisions that they had made.

Being "debt-free" is not as good of a thing as one might think. Sure do not have debt that you can't pay, limit your debt to amounts you can pay, but also use debt to grow as well. I personally have a credit card AND a loan that I am paying, but thanks to those I have purchased stuff that I couldn't ever get with cash, in an inflationary nation like mine, spending money today with credit card means that by the time my debt is over, the price of the product will be huge. So if you use your debt smartly then you are going to be fine, but if you go into debt without knowing what you are doing and just a shopping spree like an addict, then obviously your debt will ruin your finances.

Financial intelligence is demonstrated in how we handle our financial responsibility and how we place our scales of preference on things that we tend as necessity, want and also what we classify as luxuries because you can afford to be luxurious with debt and at most, the only reason to take loans should be for starting up something new,  and that thing being able to service the loan on it own,  so why then should I spend too much using a credit card that I know is not my money and also I get heavy interest on that money,  and if that be the case then I will only spend the amount I know I will be able to afford to on my own,  that is the reason I prefer using cash or my own bank cards mostly debits cards.

I have never had a credit card all my life,  and I don't intend to have any for a long time probably forever,  because I will make sure to build my expenses around my budget and income per month.

Fixing your credit score to take out big loans is actually a hint of one being financially sound. You are aiming for that loan because you might use it to something beneficial e.g. starting a business, buying a home, etc. The mere fact that you are responsible enough to be on track with your debts, plus having a clear financial goal means you understand what you're doing. Even the lower middle class people can do this, provided that they are really tight on their budget and are strictly following the needs > wants ideology.

It takes strict compliance and obedience to one's plan to be financially literate. It's just discipline with a direction at the end of the day.

Use of technology doesn't mean you are well educated in that sector. We are using bitcoin that uses blockchain technology which means all the investors are well aware of all the technical terms bitcoin has! This doesn't make sense. However credit cards are a technological advancement and if you show an illiterate person how to use them, he can use a credit card like others. It is not that hard to understand and doesn't require a degree.

In general, I don't agree with this because I have an older cousin who has actively used a credit card for almost 10 years, he has a stable job and the monthly salary he receives is deducted by credit card payments every month, because he actively uses a credit card, he get a gift from the bank that provides the credit card he uses.

whether you are a credit card user or not a credit card user, if you are able to manage your debts - investments - savings wisely then you already have high financial literacy.

Sometimes we spend more when we use credit card to buy things online because we might always be tempted to go for something that would even cost us more than what we can afford on a regular basis. We need to make plans and have a scale of preference when we want to buy things online becau6we might not even know when we have spent money we have budgeted for other things because iof careless use if credit card when shopping online. I would reather prefer the use if cash when. Shopping because this makes me to regulate and adjust my spending when shopping at any time.

Credit cards are used almost everywhere today. Since credit card usage is related to many issues, it varies on an individual basis. Credit card usage in developed countries is not higher than in undeveloped countries. There may be many reasons for this but I think it is disadvantageous not to use a credit card in a country with inflation that has captured the whole world in recent years. Because most underdeveloped countries are struggling with inflation and in an environment of high inflation, you can postpone your spending with credit cards.
I think a credit card used wisely is one of the effective solutions to the cost of living. If a credit card user is financially literate, a credit card is a shining jewel but a credit card in the hands of a person with poor financial literacy is like a dangerous weapon. I exempt from my comments on the use of credit cards those who want and prioritize anonymity.

Interesting topic op. I don't think that using credit card reflects financial literacy though it is a fact that people who use credit cards more often than cash tend to end up in debt way quicker.

Personally, I use a bit of everything though my primary usage is digital cash and I don't really take loans unless absolutely necessary.

Avoiding using a credit card for purchases is definitely responsible financial behaviour but it doesn't necessarily indicate financial literacy on its own. Financial literacy required a wide range of knowledge & skills like budgeting, saving, investing & understanding financial concepts. Avoiding credit card usage can help prevent debt, being financially literate involves understanding how to manage credit effectively, build a good credit history & make good financial decisions based on your individual circumstances & goals.