How To Use Credit Cards The Right Way

Discussion in Credit Cards started by butterfly1 • Apr 29, 2015.

  1. butterfly1

    butterfly1Member

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    So many people in the media will have you afraid to have a credit card. I think that the idea of a credit card is so scary because people have not discipline (many people anyway). I recently heard of this awesome story of this guy saving $30,000 using his credit card. How he did it? He had a monthly expense budget of $3,000 per month. This included his rent, utilites, food etc. He made $4,500 net take home pay. He had a credit card limit of $10,000. He did not slurge on his credit card. Instead he would pay ½ the bills on the card. The other ½ he would pay with one of his checks. So at this point he had ½ to put in savings. The following month he would pay off the card $1,500 and do it all over again. He was able to save for the down payment of his dream home and keep his debt to credit ratio low. This story inspired me. I hope that it inspires you as well.
     
  2. yvannahgeorgianne

    yvannahgeorgianneNew Member

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    I wish I would be able to acquire that kind of discipline as well. I am scared with the idea of getting credit card, because, you're right, I'm scared I would not be able to discipline myself and end up buried in debts. I'm still being supported by my family and still in school but I'd like to be financially independent as early as possible. I'm still thinking of getting one, and if ever I will, I hope I'd be successful like the man in your story.
     
  3. xTinx

    xTinxWell-Known Member

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    I'm also of the same opinion. The one that invented the credit card must have had advanced and bulk payments in mind and didn't expect users to actually mishandle it. Everything went out of hand when banks reduced their standards and mass approved applications, even those from unqualified people. Credit cards should only be used for paying bills in advance or as backup to your savings. It's unfortunate that people abuse it just to show off or spend beyond their means.
     
  4. BrandonScooterman

    BrandonScootermanActive Member

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    Credit cards are great if you are disciplined to use them wisely. Even as I say that I carried a $1 000 balance on mine last month. Sometimes things just pile up and even with the best intentions you carry a balance.
     
  5. butterfly1

    butterfly1Member

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    You are doing the right thing. If you are not financially stable it is not a good idea to get a credit card. You can actually kill your dreams of financial freedom before you truly get to start. I made some mistakes in college. I was given the wrong advice. Now I help people to avoid the crap that I have done.
     
  6. Corzhens

    CorzhensWell-Known Member

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    I have several credit cards, not for any other reason but for ease of accounting of our expenses. The same with my husband, he also has several. There is a credit card solely for gas - since we have 2 cars, this is more convenient to check. We also have another for groceries. For me, I have a credit card for my shoes and clothes and other mall items. And another card for some other uses like restaurants. So when the billing comes, I can easily spot on what items we were overspending on.
     
  7. GemmaRowlands

    GemmaRowlandsActive Member

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    I am excellent with my credit card, and do something similar with it. I get rewards points for everything that I spend on it, so I always make sure that I do all of my spending on the credit card. I will then leave it for the interest free period, so that the money is in my bank account earning interest, and then before there is any interest added to the card, I will pay the balance off. I think that I probably save around 4% on everything that I buy just thanks to the value of the rewards and the interest in my bank account, so it is more than worth making the effort with it.
     
  8. Onionman

    OnionmanActive Member

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    Thankfully I haven't got myself in a situation to run up a big credit card bill. That's not to say it won't happen, as sometimes unforeseen circumstances will force it upon you. But it's all about having a strategy that allows you to pay it off. There are several rules of thumb and thought processes people apply, though for me it's all about one that works for the individual.
     
  9. Kavon

    KavonNew Member

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    It really depends on how you use a credit card. If you're just using to spend money on things that you can't afford and accumulating huge amounts of debt, then that's not good. But if you're using it as an investment tool, like in the example you've given, then it can be of great use. Another good example would be, owning a small business and using your credit card to buy inventory.
     
  10. Rinda36

    Rinda36New Member

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    Having a credit card can be a great asset to you if you use them correctly. You generally want to keep your card(s) at 30 percent utilization or under and never charge anymore than you can pay off. In this way, you avoid interest charges as well as show great credit to debt ratio. Creditors look at this as a positive thing. Doing this over time, builds a great credit history and allows you to attain better interest rates for mortgages and auto loans as well. This in turn saves you money in the long run. So its all about how disciplined you are when you use your credit. Being responsible with it is key to using it to your advantage.
     
  11. Krissttina Isobe

    Krissttina IsobeWell-Known Member

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    That's so great that credit cards are so handy and you can actually get ahead using them! All I can say is that credit cards are sure handy for the unexpected too! Credit cards are good for life!
     
  12. Aree Wongwanlee

    Aree WongwanleeActive Member

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    I don't have a credit card because I don't have a regular income and I have to show at least three months' pay slips to apply for a credit card. However, my ATM card is also a debit card. I use this whenever I could. It helps me to save some money. Let's say I make some purchases at the supermarket totally $75. If I were to withdraw the cash from the ATM, I would have to withdraw $100. After paying the $75, somehow I will also spend the $25 as well on some other things. When I use my debit card to pay, $75 is all I spend.
     
  13. remnant

    remnantActive Member

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    I don't have a credit card but if I were to acquire one, I would make sure that I use it as a last resort. Just like some people splurge cash when they get a windfall, this lack of frugality will translate to the same quagmire if they embrace the credit card. I would only use it for capital goods or stock which would enable me to generate money.
     
  14. remnant

    remnantActive Member

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    I don't have a credit card but if I were to acquire one, I would make sure that I use it as a last resort. Just like some people splurge cash when they get a windfall, this lack of frugality will translate to the same quagmire if they embrace the credit card. I would only use it for capital goods or stock which would enable me to generate money.
     
  15. Alexandoy

    AlexandoyWell-Known Member

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    I have been using my credit card for as far as I remember and I didn't have any issues simply because I am a very disciplined person when it comes to spending. Besides, I only use my credit card for necessities particularly the groceries and gas of the car. For eating out, I am frugal so there's no worry in overspending. I know of so many people losing control of their spending because of the temptation of using the credit card. All they need is a little discipline and that would do it.