LoveToGod

Poll: What is your view about using Credit?

Recommended Posts

After several responses to another thread, I thought it would be interesting to do a poll and find about what people think about using credit.

Do think:

1. No credit should be used at all period.

2. Credit should only be used in an emergency.

3. Credit should be used for big things like a house and car

4. Credit can be used for anything as long as you make the payments

5. Credit can be used as long as you don't extend yourself and make payments on time

6. Credit can be used as long as you don't debt to income ratio is not over a certain percentage

7. Other

Part #2: Have you seen the documentary Maxed out, and if so what do you think of it?

Me personally I go with #5 & #6.

Share this post


Link to post
Share on other sites

7. Other

Personal credit should be used as minimally as possible and never to purchase anything you couldn't buy outright at the time you charge it, with the exception of a house. Credit is a necessary evil if you want a mortgage, but otherwise wholly useless and dangerous. You should have an emergency fund in case of emergency, not drown yourself in debt in your lowest moments. You should, at all times, live within your income, even if that means you don't have as much "stuff" or as many "luxuries".

Share this post


Link to post
Share on other sites

I have Paid in Full on just about every credit card purchase I have ever made in 25 years.

I use credit for large purchases such as a mortgage and car loan that's it. I do charge on my cards just to keep them active and build credit scores for The auto and mortgage loans so that I can get cheaper loans, but my CC's always get PIF every month.

It's just not very smart financially to run up credit cards and incur ridiculously huge finance charges. Paying an extra 6-10-20+% to a credit card company for your purchase is just not financially very wise.

My credit use is to make things cost me LESS.... not more.

Share this post


Link to post
Share on other sites

I did want to add that my husband and I have a focused financial/credit philosophy...

Money borrowed on credit should be used to make more money. Being broke is is better than being in debt. Owing money is giving up personal freedom in a sense.

for example:

buying a house: over time - builds equity... increases net worth.

buying a (personal) car: cars only depreciate, can't make you money, best to pay cash, 0% financing can build your credit but can also eat up your available credit too. If you pay cash it can't be repo'd and can't be reported negatively on your credit report.

credit cards: used to build credit score when used wisely and paid off every month (I like to check online and pay balance BEFORE statement comes out)... can lead to larger business credit opportunities etc.

I agree with what looksbothways posted.... if you don't have the cash to pay the credit card you are using for each purchase... you don't need to buy it.

Credit cards aren't cash replacement, just a cash shell game you can use to increase your credit score.

Like I've told my husband these past few years while trying to clean up our credit... at least bad scores prevent us from getting credit we shouldn't get and make us think hard about what credit means to us and what it can do to enhance our lives instead of detract from them.

Good polling question Joseph.

Share this post


Link to post
Share on other sites

I guess I'm falling into #7 - Other.

I don't exactly know my reasons for using credit, considering that I will only pay with a credit card for something that I already have the cash to buy and have the cash to PIF prior to statement close. I refuse to pay interest on anything purchased with a credit card, as I believe that is throwing money away...So if I don't have the cash to pay it in full within 2 weeks or so, I don't buy it.

As far as a house is concerned, at some point we're going to upgrade. I'm assuming it'll be within the next 5 years or so. When that point comes, it's the only purchase that I can justify paying interest on to a certain extent...And even still, it bothers me. *shrug*

...The documentary? No. I haven't seen it. Don't really have a desire to. Just like when "Supersize Me" came out regarding fast food - eventually I watched it out of boredom, but it wasn't anything that I didn't already know.

Share this post


Link to post
Share on other sites
I have Paid in Full on just about every credit card purchase I have ever made in 25 years.

I use credit for large purchases such as a mortgage and car loan that's it. I do charge on my cards just to keep them active and build credit scores for The auto and mortgage loans so that I can get cheaper loans, but my CC's always get PIF every month.

It's just not very smart financially to run up credit cards and incur ridiculously huge finance charges. Paying an extra 6-10-20+% to a credit card company for your purchase is just not financially very wise.

My credit use is to make things cost me LESS.... not more.

I agree with this too.

Share this post


Link to post
Share on other sites

Credit cards aren't cash replacement, just a cash shell game you can use to increase your credit score.

Shell Game is a good way to put it.

Share this post


Link to post
Share on other sites
I guess I'm falling into #7 - Other.

I don't exactly know my reasons for using credit, considering that I will only pay with a credit card for something that I already have the cash to buy and have the cash to PIF prior to statement close. I refuse to pay interest on anything purchased with a credit card, as I believe that is throwing money away...So if I don't have the cash to pay it in full within 2 weeks or so, I don't buy it.

As far as a house is concerned, at some point we're going to upgrade. I'm assuming it'll be within the next 5 years or so. When that point comes, it's the only purchase that I can justify paying interest on to a certain extent...And even still, it bothers me. *shrug*

...The documentary? No. I haven't seen it. Don't really have a desire to. Just like when "Supersize Me" came out regarding fast food - eventually I watched it out of boredom, but it wasn't anything that I didn't already know.

I know some people don't like documentaries. For me it depends on what its about. I find some of the interesting. I will tell you that I did not eat McDonalds for at least 2 months after that!

Share this post


Link to post
Share on other sites
Guest BucFan

I had superb credit prior to my hardships. Never late on a payment... never.

Then everything went in the crapper, just like things always do.

In hindsight... I wish I hadn't used those CCs when we lost our jobs. If I had cut them into pieces instead of using them to pay the electric bill, car payments, dinners, and a bunch of useless crap, I would be better off today. But at least, now I'm a little smarter, a little wiser, and a lot more appreciative of the things God has given us.

The way I see things today is pretty simple.

Credit is to be used to buy a home or invest into your business. Nothing else.

Obviously you must build your credit, and that requires CCs and small loans.

But just like another poster here said, If you can't buy it cash. Don't buy it with your card. It's that simple.

Share this post


Link to post
Share on other sites

My view on credit...

I had been creditless for 20 years, Yes I let it go bad and learned to live on what we made...We own several homes and cars and paid cash. I learned to save up for what I wanted.

Now that I have credit, I do not use it foolishly and plan on closing several low limit tradelines.

I don't buy anything I cannot afford to pay off within 6 months. I have a spending plan and I stick to it...I don't just buy because I can.

I did not buy a new tv, or anthing major for myself, not even a new laptop and I'm a GEEK...My laptop works fine...so buying cause it's the new thing and everyone has no...no way.

The only impulse buy I had was the plane ticket to see my dying Uncle...No hesitation there and no remorse.

And for those of you who are using credit cards to buy groceries and necessities...PLEASE DON"T...find some other way...

Share this post


Link to post
Share on other sites

I did not buy a new tv, or anthing major for myself, not even a new laptop and I'm a GEEK...My laptop works fine...so buying cause it's the new thing and everyone has no...no way.

I hear that. I work on computers and people think that just because a new operating system came out or a new version of windows they have run out and buy it.

Share this post


Link to post
Share on other sites
After several responses to another thread, I thought it would be interesting to do a poll and find about what people think about using credit.

Do think:

1. No credit should be used at all period.

2. Credit should only be used in an emergency.

3. Credit should be used for big things like a house and car

4. Credit can be used for anything as long as you make the payments

5. Credit can be used as long as you don't extend yourself and make payments on time

6. Credit can be used as long as you don't debt to income ratio is not over a certain percentage

7. Other

Part #2: Have you seen the documentary Maxed out, and if so what do you think of it?

Me personally I go with #5 & #6.

Not to lose focus of what this thread is for. It just as much for poll as it is about the video Maxed out.

Share this post


Link to post
Share on other sites

I would have to say that I fall in 2 and 7.

I am one of those that feels that if you can't pay something off, don't use it. But I am also one of those that if I have the right card with benefits, I will use the card all the time to earn these benefits. For example, I have my Carnival card and 2 NFCU cards that do airline miles. I use them all the time so that I can earn free cruiseline trips and airfares since DF's family is down in Texas. It helps when you don't have to pay for all 4 airfares all the time. Even 1 airfare helps once a year.

Until my mom died I paid everything off and that was an emergency. After having to pay for her whole funeral, it did take a while to do it but got it done. So, now I use and pay off my cards for the perks.

Share this post


Link to post
Share on other sites
After several responses to another thread, I thought it would be interesting to do a poll and find about what people think about using credit.

Do think:

1. No credit should be used at all period.

2. Credit should only be used in an emergency.

3. Credit should be used for big things like a house and car

4. Credit can be used for anything as long as you make the payments

5. Credit can be used as long as you don't extend yourself and make payments on time

6. Credit can be used as long as you don't debt to income ratio is not over a certain percentage

7. Other

Part #2: Have you seen the documentary Maxed out, and if so what do you think of it?

Me personally I go with #5 & #6.

I will go with 2,4,5

3 justs goes without saying, I don't know anyone who is cash-rich. (e.g. There is nothing on the planet that is impossible to buy for a cash-rich individual....he can pretty much pay for anything on the spot, worry-free without financing). My point is I will need credit for a mortgage but it isn't my only thing. Debt-to-Income ratio is low enough as it is, and I plan on keeping it that low. And as for 1....if I felt that way, what the heck am I doing here?! [most] People need credit to get certain things...sad fact of life. I wish it weren't true, but it is.

Share this post


Link to post
Share on other sites

After several responses to another thread, I thought it would be interesting to do a poll and find about what people think about using credit.

Do think:

1. No credit should be used at all period.

2. Credit should only be used in an emergency.

3. Credit should be used for big things like a house and car

4. Credit can be used for anything as long as you make the payments

5. Credit can be used as long as you don't extend yourself and make payments on time

6. Credit can be used as long as you don't debt to income ratio is not over a certain percentage

7. Other

Share this post


Link to post
Share on other sites

Depends entirely on what its being used for. A reasonable home purchase or student loan to advance your career is a great use. A flat screen TV purchase or a day at the mall is idiotic (unless you PIF at end of month or your credit card is 0%apr and you string out payments to collect the interest in the bank).

I think the term "credit" casts such a wide net that you'll get all kinds of answers.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.