Do You Have Credit Cards?
Credit cards can be good and bad. The obvious down side it that you can spend way more money then you have. And there are upsides to a credit card besides airline miles (insert sarcastic font).
The down side of a credit card is running a balance. If you are running a balance from month to month (meaning you pay interest), you are wrong. Even 0 percent cards shouldn’t have a balance. If you have a balance that means you are not managing your money well. Your money is managing you. If you always have a balance and don’t know how to pay it off, check out Dave Ramsey. He is the “get out of debt guy.” He will tell you to cut up your credit cards, they will bring you nothing but trouble. Credit card companies are sharks. They sit around inventing ways they can take money from you. If you think I’m wrong just try reading the cardholder agreement some time. There is stuff in there that you won’t believe is legal.
The up side to credit cards is not the airline miles. In fact most miles are never redeemed. The only gimmick you want is cash back, even then it’s not a good reason to use a card (most of the time it’s so complicated you will spend more time figuring out the program then it would have taken you to earn the couple bucks you’ll get back). The true value of a credit card is when something goes wrong. First you have legal protection and are only responsible for up to $50. Debit cards don’t have the legal protection, only the cardholder agreement (read it and it says they can change the agreement at anytime for any reason).
I also enjoy that if something goes wrong it’s not real money. If someone steals your debit card, they drain your account. If someone steals your credit card, then you have no loss yet. When it comes to getting your money back a bank has no skin in the game. It’s your money that is gone, out of your account, so they’ll get to it when they can. A credit card company has to put up the money, so they are more inclined to help you.
Lastly is the charge back option. You can legally dispute any charge up to 60 days for any reason and the credit card company has to investigate. On a debit card it goes back to the cardholder agreement. If you order something from the Internet and it doesn’t come, simply go through the process with your credit card and they will credit your account. Try and get a bank to put their money in your account.
I use a credit card for online purchases and any auto monthly charges. I also used a Capitalone credit card while I was traveling overseas because it had a 0 cost of conversion. My bankcard wanted to charge me a currency conversion fee and a doing business overseas fee. I also don’t allow utilities, gyms, or anyone for that madder, to directly debit my bank account. There is way too much fraud and the banks haven’t even tried to put in any safe guards. Once again, if there is something that goes wrong, try and get the bank to put money in your account.