Inspired by "why would you charge to cc" thread

[SleepyatDVC]

This poll is inspired by the "why would you charge to your cc if you won't be able to pay it off" thread.

Just curious about the results.

Now please be respectful of each other. Don't want to start another debate or cause tension. You can vote in the poll without leaving a post.

As for me, we are lucky enough to be able to pay off our cc bills each month. Hate having to pay interest charges on it when I have the money in the bank. We try not to overcharge each month because it does hurt to see that money come out of the checking account! Lol!

Now the previous thread was actually, I believe, inspired by a thread about putting the purchase of DVC onto a cc. Personally, we paid our DVC resale in cash. If I could, I would have preferred to pay for it with a cc (gotten benefits) and then paid that off at the end of the month. But that wasn't an option going resale.

Even though I have the money in the bank to make a large purchase, if a deal such as 0% or any interest under 2% was offered by a cc, I would choose to put it on the cc and keep my money in the bank. One so that I don't deplete all the money in the bank at once - security and better cash flow. Two because I feel that "I am still making my money work for me" by whatever little interest I still earn on it.

I would only charge it if the low interest was for the life of the loan or if it is for a limited time that I would be sure that the loan would be paid off before then.

That's just my opinion about how I like to handle my own finances. Others may agree or disagree and that's fine.

This poll is just for fun to see how we differ. Please no bashing. Thanks.

 

[PatriciaH]

Originally posted by SleepyatDVC
Even though I have the money in the bank to make a large purchase, if a deal such as 0% or any interest under 2% was offered by a cc, I would choose to put it on the cc and keep my money in the bank. One so that I don't deplete all the money in the bank at once - security and better cash flow. Two because I feel that "I am still making my money work for me" by whatever little interest I still earn on it.

I would only charge it if the low interest was for the life of the loan or if it is for a limited time that I would be sure that the loan would be paid off before then.

This is how I feel and thats why I voted "other." I have a low balance on an AMEX at 0% until next September. I could pay it off today but would rather get the interest in my money market

 

[mudnuri]

I can't vote because theres only 1 choice......

I have a sears card with a balance- 0% interest till July/05

and then we have regular visa/mc cards with balances that are paid off each month..

then we have company cards, that always seem to have a balance, even though they're paid off each month...there doesnt seem to be a day go by that something isn't charged. however, the day they get the payment for the previous month- we've already got a balance for the current month...so , technically its paid off, but it's always got a balance-

that's as confusing to me to type as it is for you to read im sure!

Brandy

 

[Lucky4me]

We have two cards we use for cash back rewards only. Charge and pay it off each month. This amounts to several hundred dollars annually that goes into dd's savings account.

I was 17 when I was sent my first credit card. No one ever taught me the dangers. I got in over my head for the next several years and it was a huge mess. Never again.
My children have been taught everything there is to know about credit cards and their personal finances. Two are in their early twenties and so far at least, neither owe anything on credit. Yay!

 

[Cyndo723]

I use a cc with frequent flyer rewards for everything that I can, and then pay it off at the end of the month. I'm down to only writing one or two checks each month to pay my bills, and I earn several flights each year. This year I even charged a car on it. ( The money was in the bank to pay for it, but I wanted the miles. I paid it off when the bill came in.) The cc is mainly for convenience and rewards. I feel like I'm using the system to my best advantage.

 

[fsufandis]

Hate to sound skepticle (sp), but I don't believe that 45% pay off their cards every month.

Not when people are spending the kind of money it takes to do these week-long WDW tips with flights, kids and all.

Someone must make some serious "Jack" to pay for a huge trip and then pay off the card in the same month.

Maybe they do here because this is the budget board, but the "national average" of people in serious debt is way off this mark.

 

[crisi]

Its because this is the budget board.

I suspect some people are exaggerating a little. But most people who are here are either here because they are learning the discipline of not spending what you can't pay off each month, or because they've already learned it and are sharing it (and learning new ways to get more bang for their buck).

We "usually" pay off our credit card each month, but I won't dip into anything but the most liquid assets to do it - or drain my savings account to do it. So sometimes we will carry a small balance for a month or two - I could pay it off, but the interest is worth the flexibility to me.

And not everyone here takes huge trips - some are driving and staying off site and managing Disney trips for not much. And some of the people here who take huge trips don't take them as often as the people taking less expensive trips. And I suspect that a few of us make "serious jack."

 

[MyGoofy26]

I'm going to throw another "reason" out there - I didn't go through the entire original thread, so I apologize if it's been mentioned already.

I got into credit card trouble when I first went to college. It's amazing the lines of credit they'll give someone whose "income" they never see - it goes straight to the university. Plus I had mom telling me, "don't work - worry about school" so after my financial aid living expense check was gone to rent and utilities, I had to rely on credit cards to go grocery shopping. So after a couple years I was $4000 in debt (a huge sum for a broke college student) and had to work my butt off trying to get rid of it. I cancelled all those accounts (some of them up to 32% interest - oh the ways they nail the college students!)

Over the past year and a half I started getting a couple small, low limit cards just to help build my credit rating back up. I did a lot of research on the best way to do this, I pulled credit reports from Privacy Guard to watch and see what worked and what didn't. What I've found out by studying the way Fico works - your rating goes up if you keep your utilization at 30%. Paying your bill in full each month actually keeps your Fico score lower because supposedly lenders want to see how you manage your bills and paying in full doesn't show them anything except you have the cash in the bank now - they want to see what you'd do if something happened to disrupt your cash flow.

I did pay the bills off every month, but I tried this 30% trick and my score shot way up. Sure I have to pay the interest fees - but then again my limits aren't that high so it's really only $1-something a month I'm paying which to ME is worth it to restore my credit.

SO - for those of you keeping balances on your low limit cards - you're actually helping your credit too. . . don't feel guilty!!

Carrie

 

[pplasky]

My husband and I have more than one card with less than 2% interest for the life of the loan. When these offers come in, we utilize them fully, and take our time paying them back. I would rather spend the monthly money paying down the mortage or sending my kids to extra curricular activities.

 

[Brian Noble]

Before we married, my wife had a couple of cards on which she carried modest, but non-trivial, long-term balances. My parents, on the other hand, drilled into me that a credit card should be used as a debit card---paid in full every month. Admittedly, I didn't always do this as a graduate student when faced with emergencies (unforseen car repairs, etc.) but then paid those off within the next month or two, and cut back on other spending in the meantime.

During the "lets figure out how to combine all of our finances" discussions I argued strongly that we should pay down her cards, and thankfully she did. Since then, on more than one occasion, she has told me that she's glad I convinced her to do this.

We have financed a car, and probably should not have, though the rate was attractive. We have financed both of our houses with conventional mortgages, and have good enough rates (6%) that I think I can beat that rate of return after taxes, so I don't pay that down too aggressively either. I also take advantage of 0% plans (e.g. furniture revolving credit) whenever I can, but since I fear being late by a day or two and getting slammed by usurious rates, I will sometimes pay them down much more quickly than necessary.

 

[disneysteve]

Originally posted by fsufandis
Not when people are spending the kind of money it takes to do these week-long WDW tips with flights, kids and all.

Someone must make some serious "Jack" to pay for a huge trip and then pay off the card in the same month.

I learned long ago that you can't judge someone's income or financial situation by what kind of car they drive, what clothes they wear or what vacations they take. The guy in the Mercedes may be drowning in debt while the guy in the beat up old pickup may be a millionaire

As for Disney trips, the family at the GF may have saved for years to afford that trip. While a family like mine that could afford nicer accomodations will drive down, stay offsite at a budget motel, eat breakfast in the room and get a pizza for dinner.

It all comes down to priorities. For us, vacations are a priority. And we would rather take frequent budget trips instead of infrequent luxury trips. To afford them, we don't have cable tv, no caller ID or other phone services, I mow my own lawn, we clean our own house, we almost never pay a babysitter, we rarely go to movies, we cook most meals at home from scratch, I hardly ever buy new clothes, we shop at yard sales/flea markets/thrift shops, etc. Is my income higher than some others here - probably, but I'm sure its lower than some others too. We just choose to live below our means by trimming back everywhere we can and spending only on things that really matter to us.

So yes, we use our credit cards constantly - they generally wear out and have to be replaced before they expire . But we pay the bill each month and reap the rewards earned on the cards. Last year we spent a week in Massachussets with free hotel rooms earned on our Marriott VISA and next summer we hope to do the same in California.

 

[SleepyatDVC]

Thanks for voting in the poll guys!

Interesting results. I guess budget board posters are generally a pretty savy group.

In hindsight, I should have included the category "only carry a balance to take advantage of 0% or low % financing."

 

[MagicalMom]

Originally posted by fsufandis
Hate to sound skepticle (sp), but I don't believe that 45% pay off their cards every month.

Not when people are spending the kind of money it takes to do these week-long WDW tips with flights, kids and all.

Someone must make some serious "Jack" to pay for a huge trip and then pay off the card in the same month.

Maybe they do here because this is the budget board, but the "national average" of people in serious debt is way off this mark.

We pay cash or use our debit cards for vacations. We use our credit cards for emergancy only.

 

[MagicalMom]

I also wanted to add that you should keep in mind that you are asking the type of person who will sit for hours & count pennies. We would hate to pay coinstar to count them for us. What a waste of money. We would hate to pay interest if we can pay cash.

 

[PneumaticTransit]

I have two credit cards, my got my first CC at 16. I have always been responsible with them. I only use them for larger purchases (car insurance) or unforseen costly repairs. I never ever ever charge more than I have in my bank account. I keep the limits low ($3000) - even when the company raised it automatically I called and had it lowered again. The only reason I have two CC is I was offered a better deal by Chase MasterCard with a low % rate and cash back for no fees. I keep the first one as sort of a keepsake since it was my first card, but I haven't used it in 2 years... I'm sure I will cancel it someday

 

[disneysteve]

We would hate to pay interest if we can pay cash.

I don't mean to single out anyone specifically, but this is a statement that I hear a lot. I find it interesting that some people automatically equate using a CC with paying interest. Of course, you only pay interest if you don't pay the bill in full each month. My philosophy is why pay cash when I can use my credit card and get reward points, not have to carry much cash, just send one payment each month and have a nice printed record of my purchases and an added layer of protection if I run into a problem with something I buy. I'm going to make the same purchases and spend the same amount of money regardless of how I pay - cash, charge or check - so why not use the method that earns me something in return.

 

[LovePug]

Originally posted by disneysteve
My philosophy is why pay cash when I can use my credit card and get reward points, not have to carry much cash, just send one payment each month

This is exactly how I think . I love those rewards !