Credit Cards
Member writes:
I am going to be leaving my bank and I need to get a new CC as well. I have a few applications through the mail and I was wondering if I should apply for one of those or if I should get one through my new bank? If you know a good way to go about this it would be great. Thank you so much again.
Money Prof:
It doesn't matter much IF you're smart enough to NEVER charge. And you pay the bill in full every month. Most people will say get the one with the lowest rate.
My personal advice to you ( and I know what I'm talking about from seeing members and employees throughout the years get in trouble) DON'T get a credit card. Use a bank debit card instead.
You'll thank me time and time again for this advice in the future, when ALL your friends have thousands in CC debt. Email me every time you get the urge to get a credit card and I'll try to talk you out of it.
Repeat: DON'T get a credit card. Use a bank debit card instead.
For those members that already have credit cards. My advice: get the scissors out.
I am going to be leaving my bank and I need to get a new CC as well. I have a few applications through the mail and I was wondering if I should apply for one of those or if I should get one through my new bank? If you know a good way to go about this it would be great. Thank you so much again.
Money Prof:
It doesn't matter much IF you're smart enough to NEVER charge. And you pay the bill in full every month. Most people will say get the one with the lowest rate.
My personal advice to you ( and I know what I'm talking about from seeing members and employees throughout the years get in trouble) DON'T get a credit card. Use a bank debit card instead.
You'll thank me time and time again for this advice in the future, when ALL your friends have thousands in CC debt. Email me every time you get the urge to get a credit card and I'll try to talk you out of it.
Repeat: DON'T get a credit card. Use a bank debit card instead.
For those members that already have credit cards. My advice: get the scissors out.
Scary Debt Stats
$1.7 trillion Total consumer credit.
$8,562 Credit card debt carried by the average American.
$50 billion Total finance charges Americans paid in 2001.
$1.6 billion Market capitalization of AT&T -- the entire corporation.
78% Percent of U.S. households deemed "credit worthy" by the lending industry.
1.3 million Number of credit card holders declaring bankruptcy last year.
posted by MoneyProf at Wednesday, June 22, 2005
2 Comments:
I agree with your above comments, ( that's the way it should be ) but I've seen too many people then switch to the minimum payment each month. In your case you have the disipline to only charge what you'll pay in full.
Think about this: do you really think the millions of people who paid over $50 billion in finance charges last year thought they would pay that at the time they took out the credit card???
Do you think the average American that owes $8,562 plus interest in credit card debt thought they would owe that at the time they first got the credit card??
If you can prove to yourself you can be in the minority that pays it off in full every month then maybe you can take the chance. But............ "proving it" to me means having put 10% of your pay into a retirement acct. for at least a year or two, having 3 months pay saved in a "rainy day" fund, having at least the down payment saved for your next car. etc. Then your odds are pretty high you'll pay it off in full every month.
Update as of latest 2004 data:
Average card debt per household with at least one credit card topped $9,300 in 2004. That’s more than triple the average in 1990.
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