Topic: Does Using a Credit Card Demonstrate Financial Literacy? - page 6. (Read 834 times)

I prefer to use cash over credit cards cards are online shopping and credit cards are a special facility offered by banks or financial institutions. This card can be used to borrow money for purchases or other services credit card loans have to be repaid within a certain period of time. Every month interest is charged if the money is returned within the specified time period. If there is delay in payment of interest due to any reason the amount of loan increases but in case of using cash money there is no problem of such interest. Not every thing can be bought with a credit card sometimes cash is needed for small items.

Why is it convenient to use a credit card? To avoid debt on obligations, The time comes for you to pay for something, but you don’t have the required amount on hand; a credit card will come in handy. But to live uncontrollably in debt is a very rash act. It's like slavery. In addition, paying by card is always psychologically easier than paying in cash. When spending cash, a person is also subject to psychological pressure about whether this or that thing is necessary at the moment and at a given price; that is, whether there is a conscious understanding of the need for the product being purchased. Therefore, I would also agree that those who spend cash are more careful about their use and are more savvy in matters of finance.

Being responsible will make you not lose track of your credit card expenses. It is indeed easy for most people to track their expenses when using cash, however, responsibly using credit cards is the same. Credit cards have benefits/promos you can enjoy, let's say using it the correct way or the correct credit card category may even give you a discount/cashback. Credit cards also have the option of paying it in full (without interest), or installment (if you worry about overspending). There are a lot more benefits to using credit cards.

You see, it's all about being responsible for using credit cards and knowing how you can maximize all its benefits. Some people are using credit cards on their business, meaning, running their businesses without even spending their own money.

There have been studies about this, and when you have the cash in your hand it becomes way more difficult to spend it compared to other forms of money that are not physical, like it is the case of a credit card or the money on your bank account, so getting rid of your credit cards and using cash exclusively can indeed help you to become more responsible with your money, however this should be part of a whole financial strategy or the positive effects you may see will be very limited.

In my opinion the owning of credit card tend to cause overly excessive consumerism, with credit card it allows you to think for later which means saving up problem for later which might cause financial instability.
although we know owning credit card definitely requires certain qualification but I still think that it really don't contribute much to our lives unless we could use it for productive purposes like making business where we can hold off payment until end of the month then only at that scenario it will be useful.
I personally would never use credit card because it might make me more consumtive than just using cash, at least with cash i have sense of guilty by wasting money, with credit card, sometime you just don't feel it and suddenly at the end of the month, the bill pop up.

IMO it's the opposite. Many people in the US with primary education own and use a credit card. At the same time many well educated people use cash on purpose to show defiance.

Politicians want us to use digital centralized money and limit cash payments, so it's important to keep using cash as much as we can and show sellers that a lot of their income comes in this form.

I primarily use cash and don't even own a credit card.

Having credit cards isnt bad as long you are really just that responsible about on how you do spend and also it do really outweighs the risks or its cons via its benefits.It is really just turns out that people would really be focusing that much about its negative.There would really be that no negative if you are really just that responsible on paying up your dues and not really just that going overdue or wont mind on repaying it out.
Also come in mind that we could really be taking advantage on having CC considering that you could really be able to make some fast cash if  you are in need which it is way more better rather than on getting some loan into some people which interest is really that high and never been worth but if someone who do sees that CC's are really that huge problems then it isnt really that bad that they would get rid of it specially
if they have seen or having those bad experiences in the past then it would really be ideal that they should gonna do on whats right.

For me then i would be seeing that CC are really that a great help since not all the time we do have fiat into our pockets on which there would really be moments or times that you would
really be needing it up and it is really that a life saver but of course you should really be a responsible payor for you not to have those kind of problems.

With cash, you can always plan better and organize your expenses. You will always be quick to make subtractions from the cash you have at hand whenever you have an expense unlike when you use a credit card that you just know that your account is funded and you are able to afford many things, it's easy to lose count or track of what you spend because you're not carrying physical cash with you. Some persons properly avoid having credit cards just so that they can be more financially disciplined and save more.

I think this case is subjective.  It depends on how a person manages his finances.  After all financial literacy is all about financial management.  There are people who don't have credit card but still unable to control their spending while there are people who have credit cards but are able to control their finances successfully.  Having a credit card in not an indicator whether a person has financial literacy or not.  It is the way they use their finances and how they manage them carefully.

I know what you mean. Holding money in your hand makes it feel more significant than making a bank transfer or touching a reader with your card.
I've never had a credit card same as most people that I know.Unlike in the US, in Europe debit cards are more popular than credit cards. Holding cash at home is a tradition for me. I've never fully trusted banks and always tried to have some money at home, especially since the ATM bank runs happened and I've learned how hard can it be to access your money when too many people want to do the same thing.
Currently, I own more cash and bitcoin than money in the bank. I don't have a loan, or a credit card and I'm happy. Don't know if that makes me literate or illiterate in financial terms. You will have to decide that on your own

There is no much comparison to make on this two as regards to the title of your topic. Having a credit card does not means financial literacy and not having it does not still mean the same. Financial literacy to me has to do with the proper management skills of your money, either in cash, or online in your bank accounts. If your funds are not save with you by letting out the security of your money for intruders to have access to it, you can be called financial illiterate. Having money to subscribe or not subscribe for any service has nothing to do with your credit cards, even without credit cards, you can always do what you like with your money if you have full access to it at anytime.

Credit cards ain't easily available to those who don't earn from one form of job or another.
To those it is available to, it is supposed to be used in a disciplined way, but it's never the case with spending, and that's how these credit card schemes make their profits.
A credit card is supposed to be a last resort when cash is unavoidably in absentia.
Using a credit card means one is literate enough to know when and how to cover their debts and can use one, it demonstrates literacy, but when we talk of financial literacy, it's a whole different ball game.

Financial literacy involves the discipline to spend, save, invest, making projections for the future and delay of instant gratification.

Simply owning a credit card barely shows the tiniest bit of financial literacy as you put it. In the eyes of a credit card company, they really want the dumbest people possible to apply for and start spending on a credit card, because it is one of the most expensive forms of borrowing around for many people. Knowing how the credit card companies are trying to make money from you is critical. Credit card companies don't really make money off people who use it correctly by paying off the balance that is due each month. They make money from the people who roll over debt and make the minimum payments for years on end, while being charged 20%+ per year for the "privilege".

Yes, it is true that those who don't use debit cards are most likely not in debt, specifically from the banks. They have set their earnings and made a monthly or weekly plan to spend their funds. The best way is to live a simple life. Even if you have to use a debit card at some shopping mall or someplace where they don't accept currency directly, try to find another way, and if you still don't find a way around, then use a debit card for such a situation.

No doubt debit cards provide a lot of benefits, they can also save your life in some emergency situations where money is needed, but in normal times, debit cards are just one of the main reasons to increase your expenses.

For example, having an idea of total income and expenditure in mind will make you buy things less. But if you have a debit card, then you might not control your desire to buy new things. We all have the desire to buy things, and when we buy them, our desire increases more, and we tend to buy more. At the end, we are under huge debt that we have to clear, and interest is also there. So, ignore debit cards and prefer to use them in the fewest cases.

I don't want to use credit card based on the experience that I've read and horror stories that I've heard. I know that it won't happen to me if they're the irresponsible credit card users.
I understand that there are actually good ways to maximize the usage of it based on the perks that you will get and the bonuses that establishments offers for the CC users that will use for payments.
It's a loan yes but as long as you pay it on the right time, you won't be in trouble.

"Does Using a Credit Card Demonstrate Financial Literacy?" - Just the opposite. This demonstrates financial illiteracy. Credit (borrowed) money is expensive.

When paying with credit or any other electronic money (or analogues), the sense of counting and control is lost, which is expressed in incontinence in spending when shopping, wastefulness and it becomes easier to make unnecessary expenses. Cash, when you see and hold the bills in your hands, these processes become more restrained. Perhaps there are some studies on this matter that could confirm this, but I can only say from my experience that paying with credit (or other) bank cards is more frivolous.

I am sure, and not just think, that this is exactly the case. Absolutely true.

Credit cards (like any other form of borrowed money) can be used, but you need to do it wisely, which most card users don't do, which causes them to go into debt and get into financial trouble.

Avoiding credit cards isn't a smart option, using the credit card wisely should be the actual financial literacy.

It's a broad topic that needs hours of talk to explain it but in simple terms don't use a credit card if you don't have the same amount in your bank account. Let's say you buy products for $100 and then buy them using a credit card even if you have $100 in your hand or bank account.

Credit cards play a vital role in credit history and credit scores which can give you eligibility fo loans at lower interest rates so when you need them for something that can give you returns this all will make sense.

Cash or credit cards are just tools..... But how they are used is an indicator of human development.
But there are other nuances that not every person can "fight", or rather the temptation to spend more than you can logically afford.
Cash has a "physical limitation" - you can't spend more than you have. A credit card allows you to do that. But here the question is only for the cardholder - why do you spend more than you have?
But cards have many advantages - for example, I don't know how it is in other countries, but in my country, for customers with good credit history and good balance there are for example convenient programs, such as interest-free purchase or 60-day interest-free use of credit funds. It's really convenient. For example, I need to buy a new refrigerator, it costs 1500 dollars. I can pay that amount for it right away. But why, if I can make an installment payment for 12-24 months, with a small amount of monthly payment and 0% interest rate.... But to have those terms, you have to have a good history, and no permanent debt. It's convenient, and it saves me money.... With cash, such a procedure cannot be realized.


Some people use cash because "big brother is watching him" In short, there are a lot of options for using both instruments to achieve different goals

The answer to your question is relative. Some persons will tell you that they spend more when they have cash because it is easier to spend. Others might have different experience. Financial prudence is not a function of cash or credit cards but self-control. You ability to spend on only what you need is more important than the payment channels.


Maybe your conclusion about the general advice most financial advisers give to people about being debt-free is based on your observation. And the advice people get from professionals is based on the peculiar experience of the person. There are many other reasons why people are indebted. Credit cards can be very helpful in times of financial emergency, so it is not bad to have one.

If it's just about financial literacy, there are folks that are maximizing the use of credit cards. They're getting more points and benefits or perks from using it.

What they do is they choose credit card providers that have waived their annual fees forever and that's the sign of them knowing how to use it.

But I'd prefer to use cash as well, I don't feel good when I think that I've got debts and that is what I am trying to avoid.