Does Using a Credit Card Demonstrate Financial Literacy?

[Davidvictorson]

There are many advantage and disadvantages to using a credit card. However, I have lived all my life in a country where all we use is debit card so I may not be able to speak from personal experience about using a credit card. What I know is that from where I am from, debt is a bad thing. You do not want to be in debt so we learn to pay for every straight from our bank account using our debt card. We do not see debt as a good thing and no one is applauded for being in debt. In fact the measure of financial literacy is avoiding debt in all its entirety.

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[Youngkhngdiddy]

I think the answers will really vary on this one. Because there are many people who use credit cards every day but they are still good at managing their finances and can still maintain their financial stability. And on the contrary, there are many people who are in debt even when they don't use or don't even know about credit cards. So I think it all depends on a person's insight and discipline in managing their own finances. Or it will all depend on the different cases experienced by each person. For example, if someone is not good at managing finances and becomes more wasteful when using a credit card, then of course the solution is to stop using credit cards and switch to cash.

  Living in debt is energy-draining. Buying stuff we can't afford might provide short-term satisfaction, but in the long run, it will suck our life away. If you can't afford to pay off the full balance of your credit card every single month, that’s enough of an alarm for you to STOP using credit cards! Always live below your means, save and wait until you can afford those expensive things. Simple living is WAY better than a living with financial bondag,  as long as you clear your balance every month. By doing so, your credit rating climbs at the fastest rate, and you often gain more points/incentives/gifts through various programs that the credit card companies are offering today.
    If cash is lost or stolen it is gone. If a credit card is lost or stolen, I am typically not responsible for any fraudulent transactions, and none at all after I can report the card stolen. credit cards are awesome. You certainly don’t have to feel bad about not paying the credit card company interest to borrow their money. Their costs are covered by the transaction fees anyway. Since credit card transaction fees are pretty much built into the prices of everything (excepting the rare cash discount) you may as well get to enjoy the benefits.

[panganib999]

Depends on how you use it. I've seen people subject themselves to crippling debt thinking that these credit cards are free money dispensers that do not bite back. It's also quite possible for you to gain higher credit, and be allowed to enjoy the finer things in life like an approved loan no matter how big that is, and all that stuff, if you're a good paying credit card holder.

It's all in how you carry it really, not about the card itself. Sure, some cards grant more power, some cheap out on features and benefits, but at the core of it all a credit card acts as your passageway to managing money more wisely, cause when you're in the face of money that's accessible whenever you need it, self-control and discipline is what would matter the most.

[jrrsparkles]

There are many advantage and disadvantages to using a credit card. However, I have lived all my life in a country where all we use is debit card so I may not be able to speak from personal experience about using a credit card. What I know is that from where I am from, debt is a bad thing. You do not want to be in debt so we learn to pay for every straight from our bank account using our debt card. We do not see debt as a good thing and no one is applauded for being in debt. In fact the measure of financial literacy is avoiding debt in all its entirety.

Avoiding debt is a good thing but it's different compared to using a credit card for purchases, if someone uses a credit card doesn't mean they don't have the money to afford it even as basic positive thing credit card gives us protection against while buying something online so if someone used it without authorization you are not liable to pay them back and banks has to bear the loss and also if you are not aware of credit card perks like cashback, reward points, best deals and lot more and the important thing is it will give us good credit score which will benefit in the future when we are in need.

[Mahanton]

There are many advantage and disadvantages to using a credit card. However, I have lived all my life in a country where all we use is debit card so I may not be able to speak from personal experience about using a credit card. What I know is that from where I am from, debt is a bad thing. You do not want to be in debt so we learn to pay for every straight from our bank account using our debt card. We do not see debt as a good thing and no one is applauded for being in debt. In fact the measure of financial literacy is avoiding debt in all its entirety.

Avoiding debt is a good thing but it's different compared to using a credit card for purchases, if someone uses a credit card doesn't mean they don't have the money to afford it even as basic positive thing credit card gives us protection against while buying something online so if someone used it without authorization you are not liable to pay them back and banks has to bear the loss and also if you are not aware of credit card perks like cashback, reward points, best deals and lot more and the important thing is it will give us good credit score which will benefit in the future when we are in need.

If you do have plans on making up some loans like housing loans,personal loans, car loans in the future then building up your credit score would really be the best thing to be done on which having those credit
cards would really be that useful and i do agree into those words above telling about perks and cashbacks or even zero interest if you do tend to buy something on which it is really that a good thing
or having those kind of benefits. As long you do make yourself a good payor or really that a responsible card holder then it would really be just that fine on having these cards.
Wrong things do only happen if you do really just missed out on paying your due date on which it would really be having that accrued interest on which it is really just that normal
but if you do pay up on the right time then it would really be just that fine or something that brings great convenience i should say.

[Baofeng]

Do you believe that someone who exclusively uses cash for their purchases rather than credit cards is demonstrating financial literacy? Many argue that people tend to be financially reckless when using credit cards, often forgetting that it involves borrowing money. In various Netflix TV shows depicting individuals in debt seeking advice from financial advisors, the most consistent suggestions for getting out of debt are usually to cut up their credit cards and transition to making cash payments.

I wouldn't say that they are financial literate, but perhaps they already know or at least they know someone who might have a bad experience with credit card that they dare not to used or apply for one and would rather used cash instead. And I think that there's nothing wrong with it. At some point in time, majority of us here has a huge credit card debt before we were able to get out of it and promise to ourselves not to go that fair and be responsible when we had credit cards.

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

But it doesn't mean though that this people are debt free, who knows maybe they got debts from people or bank but not from credit card. So we can't really say for certain that those who doesn't have credit cards are financially literate in my opinion.

[ChiBitCTy]

It all depends on how you use that credit card and what part of the world you're living in.  Here in the United States it's typically pretty important to use credit cards that way you can build credit in case you need to borrow money for things such as a car and a home, which most people need help with.  The problem comes when people get in over their heads and use the card above their means and don't make their timely payments or keep the card paid off.

[Ultegra134]

Cash is king. And more private.

Do you remember the 80's and early 90's where having a credit card was a symbol of status and high-class? Now a credit card is a symbol of being in debt.
Taxes/fees paid when you use your credit card are high, and in countries with a lot of devaluation/inflation is getting higher. The majority of people I know is using them only because they don't have the money to make a one-time hard cash payment.

Sure there are some "benefits" like travel points, refund of some taxes, etc., but this only shows that either the fee you are paying for using the card is already high, or the government wants control over the spending of their citizens.

But cash is going to be extint soon since governments are pressuring for card usage nowadays. I visited Poland two years ago, and even street vendors accepted cards for purchases as little as $0.20. You can pay with a card everywhere, and I found it extremely convenient because I didn't have to go to an ATM machine or go through currency exchanges and so on.

Personally, I have both a credit card and a debit card; the OP here is mostly focusing on credit cards. I'm using cards quite frequently, and personally, card usage makes finance management a little easier. You can keep track of your spending without too much effort. However, I do agree that you can easily lose track, especially with credit cards, if you're caught buying things in installments.

Unfortunately, though, the era when cash was king is long gone. You can't make any large purchases anymore because everything must go through the banking system. One way to possibly avoid all this monitoring would be with cryptocurrency cards, which, even though they require KYC (such as Binance's or Crypto.com), your money is still somewhat safe from the eyes of the government.

[poodle63]

There are many advantage and disadvantages to using a credit card. However, I have lived all my life in a country where all we use is debit card so I may not be able to speak from personal experience about using a credit card. What I know is that from where I am from, debt is a bad thing. You do not want to be in debt so we learn to pay for every straight from our bank account using our debt card. We do not see debt as a good thing and no one is applauded for being in debt. In fact the measure of financial literacy is avoiding debt in all its entirety.

but that stigma different when we are really into the business field, debt is just a way to grow your business faster, credit card is no exception if taken advantage properly you could get all the benefits of the credit cards in your business, as long as its productive debt it will be fine.
the only problem when people are taking loan just for luxurious stuffs like buying expensive cars, then it will become a problem since they are just giving burden towards their income but if it is debt specifically for business i'm pretty sure it will be quite of a help, imagine you got potential of expanding your profit, but stuck with the capital and equipments, simply use credit card to buy equipments to expand your business, the debt will eventually get settled meanwhile you get massive income increase.

[bayu7adi]

There's nothing wrong with credit cards, it's how people use them that matters. We're currently living in a time with significant social inequality, where the rich keep getting richer, and the poor struggle to make ends meet. In my opinion, credit cards are designed for the financial needs of wealthier individuals, those who have a steady monthly income even if they have high spending lifestyle. entrepreneurs often have substantial monthly earnings, and using a credit card is seen as a convenient and helpful way for them to conduct transactions. Since they have no trouble covering their expenses, those using credit cards can easily pay their bills every month. Given the substantial amount of money they earn, their extravagant lifestyle might only account for 10% or 20% of their total income. So, they're not wrong to use credit cards, are they?

The real issue with credit cards arises when people with relatively small incomes rely solely on a single source of income, which isn't substantial enough. If you're struggling to make ends meet, it's not advisable to use a credit card for everyday expenses. However, it can still make sense to use it for wise financial transactions. Credit card users should understand their own lifestyle and the size of their income. these aspects are interconnected and vital for their financial health.

[gunhell16]

A credit card will only be useful and helpful when the card is used by the right and wise person. Of course, the presence of this credit card makes it very easy for us to carry out transactions because with a credit card we don't need to bother carrying cash when shopping in large amounts and the presence of a credit card can also help us in times of urgency, helping us to meet our needs. when we don't have enough money to meet these needs. because with a credit card we can make a loan without collateral. However, this can be inversely proportional when this credit card goes to the wrong person and is careless in doing something. The presence of this credit card could have bad consequences because it could allow someone to behave carelessly, namely shopping without any restrictions and doing this just to fulfill their desires, so that in the end this will only make someone become in debt.

bottomline, you can only appreciate having your own credit card if you are responsible enough in managing it. but a nightmare if you happen not to control your spending habits.
for me, it is better not to use credit card at all, at least, there's no temptation. most of what we buy usually is the product of our impulses.

Everyone has their own choices and views in assessing something. If the presence of this credit card can harm and endanger yourself because it will only lead you to a bad behavior. then the decision not to use a credit card at all is the right decision.
I personally think that the presence of this credit card is very useful because it can help me when I am in a fairly urgent condition and I think that I have good enough self-control so that in using this credit card I can use it wisely. Another reason why I use credit cards is because I am well aware that I do not have enough savings to be able to answer when I have an urgent need. And maybe I will only stop using this credit card when in time I already have enough savings.

That's right, I'll just add the reasons why a person borrows.

- The person borrows because of an emergency that unexpectedly occurs in their life.
- Borrowing because of luxury or something they want to get that they may not be able to buy with cash, so the loan method is their
  solution.
- The others made it a habit, so as a result, they continue to be buried in debt as time goes on.
- the others borrow to show that they have a credit card, or they are leveling themselves to rich people even though they are not really rich;
  in short, those who try hard or feel rich are not really rich.

So these are just a few of the reasons for borrowers, but at the same time, you must be responsible for paying and don't end up looking like you are the arrogant one when you are the one who owes the debt.

[Dr.Bitcoin_Strange]

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

If financial discipline were a human, then it basically would not have been everyone at the same time. It's likely to be only one person. What do I say so? People are born with different traits and raised with different disciplines (different parents and backgrounds); no one was single-handedly born with the ability to use money or manage their financial lifestyle properly. There are people who don't stress about anything in the sense that they are always content with what they have. For instance, if you go to the market and have a budget of things you were supposed to buy, but you see a different one that is more expensive than the one you have in mind to purchase, instead of going for the one you intended to, you decide to go for the costliest one. That kind of attitude is what some people cannot portray, whether they are using a debit card or cash. So, in my opinion, it all depends on the individual. There are some people who will go vaaa with a debit or credit card, and some will not. Some people will also go vaaa with cash, and some will not.

[BitcoinTurk]

Financial intelligence is demonstrated in how we handle our financial responsibility and how we place our scales of preference on things that we tend as necessity, want and also what we classify as luxuries because you can afford to be luxurious with debt and at most, the only reason to take loans should be for starting up something new,  and that thing being able to service the loan on it own,  so why then should I spend too much using a credit card that I know is not my money and also I get heavy interest on that money,  and if that be the case then I will only spend the amount I know I will be able to afford to on my own,  that is the reason I prefer using cash or my own bank cards mostly debits cards.

I have never had a credit card all my life,  and I don't intend to have any for a long time probably forever,  because I will make sure to build my expenses around my budget and income per month.

Financial responsibility is definitely about how one should manage one's budget but it is also necessary to gain experience to be aware of financial responsibility and shape it. Of course, the use of credit card debt or loan debt will vary from person to person but the important point is how a person will control this debt. For example, buying a car with a credit card can be considered a luxury expense but making money by using this car and paying off the car's debt depends entirely on the financial intelligence of the person. On the other hand, as I mentioned in my previous comment, the correct use of credit card helps to purchase luxury consumer products more easily. For example, paying in installments in a currency with a high inflation rate actually helps to obtain the purchased service or product at a lower cost and helps to obtain it more easily compared to paying in installments.

Of course, it is your choice not to have a credit card for the rest of your life and not to think about having one for the rest of your life. Who knows, maybe if you had a credit card you might have been paying credit card debt continuously for years. I think that people who are especially interested in luxury consumer products and who cannot achieve financial control should definitely not have a credit card.

[Mauser]

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

Everybody I know has a credit card, over the last few years there was a big push by banks to roll out free credit cards for your bank account. I haven't really thought about why this is the case, but it seems that banks wants us to use more plastic and less cash for payments. The majority of my friends use cards for payments, I am definitely the majority as I prefer to pay with cash wherever possible. It might take longer and is less comfortable, but with cash I directly know how much money I have with me and I don't face the risk of spending more than I have. My credit card I only take with me on vacations as something for emergencies. When going to a foreign country I exchange money beforehand and always bring cash with me. Maybe I was just lucky so far, because I didn't get robbed yet. Overall I would say that people that want to have a closer oversight over their money will stock to cash and avoid credit cards.

[Synchronice]

Do you believe that someone who exclusively uses cash for their purchases rather than credit cards is demonstrating financial literacy?

Someone who exclusively uses cash for their purchases either lives in Germany or is very old and can't befriend with modern technics or cares about privacy and doesn't want to show bank whatever he or she buys.

Many argue that people tend to be financially reckless when using credit cards, often forgetting that it involves borrowing money. In various Netflix TV shows depicting individuals in debt seeking advice from financial advisors, the most consistent suggestions for getting out of debt are usually to cut up their credit cards and transition to making cash payments.

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

I have never used credit card but I often use debit card, it's annoying to play with paper and coins. By the way, there is nothing wrong with borrowing money, sometimes it's necessary and beneficial, it's not a coincidence that many rich companies have a huge debt too. Debt is an art itself, if you master it, you'll succeed because debt can bring profit. ‎Robert Kiyosaki speaks interestingly about debt, I suggest you to check his speeches.

[justdimin]

I think there is no difference - spending cash or money from a credit card. Both are a waste of money. In order not to be a spender, you need to have a special mindset. For example, my thinking changed a lot after Robert Kiyosaki's book Rich Dad, Poor Dad. I immediately realized that money is not an element of what allows you to buy. And the fact that money is a tool for earning even more money. Therefore, you need to save and save, and if possible, buy bitcoin cheap and sell it for a high price. It was then that I learned the technical analysis of prices, and the concept of Compound Interest.

Of course, there are differences. Those who spend cash must be the one's who waste money, but not literally if they spend it on the things that they truly need like food, medicine and basic clothing.

There is no way we can avoid to spend because we are only humans and almost everything thing or move that we do requires a money but you can also use your cards if you have one. Maybe what you mean is how to not be an over-spender. Money is actually an element you can use to buy something or to avail some service, but yeah you can use your money to be able to earn more money. Only keep in mind that it is still possible to earn money even if you don't have any of it.

[DrBeer]

Taxes/fees paid when you use your credit card are high, and in countries with a lot of devaluation/inflation is getting higher. The majority of people I know is using them only because they don't have the money to make a one-time hard cash payment.
Sure there are some "benefits" like travel points, refund of some taxes, etc., but this only shows that either the fee you are paying for using the card is already high, or the government wants control over the spending of their citizens.

That's where you're badly mistaken. For example, Visa/Mastercard credit card from PrivatBank/Monobank/PUMB and similar system banks in Ukraine has no subscription fees and additional commissions.
On the contrary - many cards offer additional services - cashback from purchases, payment of services without commission (e.g. utilities), interest-free short credit facilities (up to 60 days), interest-free purchase in installments up to 24 months (usually for household appliances, furniture, etc.). Perhaps there are some problems with the banking system in your country, but in my country bank credit cards are an objectively convenient and cost-effective financial instrument. But as with any tool, you need to know how to use it, so as not to harm yourself.

[angrybirdy]

Do you believe that someone who exclusively uses cash for their purchases rather than credit cards is demonstrating financial literacy?

Someone who exclusively uses cash for their purchases either lives in Germany or is very old and can't befriend with modern technics or cares about privacy and doesn't want to show bank whatever he or she buys.

Many argue that people tend to be financially reckless when using credit cards, often forgetting that it involves borrowing money. In various Netflix TV shows depicting individuals in debt seeking advice from financial advisors, the most consistent suggestions for getting out of debt are usually to cut up their credit cards and transition to making cash payments.

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

I have never used credit card but I often use debit card, it's annoying to play with paper and coins. By the way, there is nothing wrong with borrowing money, sometimes it's necessary and beneficial, it's not a coincidence that many rich companies have a huge debt too. Debt is an art itself, if you master it, you'll succeed because debt can bring profit. ‎Robert Kiyosaki speaks interestingly about debt, I suggest you to check his speeches.

Precisely! there's nothing wrong in borrowing money as long as you'll be using it in necessary things like daily needs in life and other important purchases. Before, I'm against in using credit card because it is credit and I don't want to have any debt in bank but lately I realized that there's so much more benefit in using it just like shopping discounts and cashbacks, also some credit cards offer 0% interest and installment if you need to buy something like appliances. Also it is convenient to use since you don't need to withdraw a money which is hassle for me because of ATM line and ATM withdrawal fee.

[AicecreaME]

Do you believe that someone who exclusively uses cash for their purchases rather than credit cards is demonstrating financial literacy? Many argue that people tend to be financially reckless when using credit cards, often forgetting that it involves borrowing money. In various Netflix TV shows depicting individuals in debt seeking advice from financial advisors, the most consistent suggestions for getting out of debt are usually to cut up their credit cards and transition to making cash payments.

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

I can't deny the fact that using a credit card when you buy something makes you different from others, I mean for some people they use it to be cool, and to show that they have a lot of money to spend, but not all credit cards users are wealthy people, others just don't have any idea what's the disadvantage of using one or they just love to brag.

Paying in cash is much cooler for me, and I am complacent that I don't have a high interest fee to pay when it's time to pay. I've had a friend who pay a large debt because he used his credit cards like crazy not knowing that he needs to pay the interest by using a credit card.

[Biznesmen]

Do you believe that someone who exclusively uses cash for their purchases rather than credit cards is demonstrating financial literacy? Many argue that people tend to be financially reckless when using credit cards, often forgetting that it involves borrowing money. In various Netflix TV shows depicting individuals in debt seeking advice from financial advisors, the most consistent suggestions for getting out of debt are usually to cut up their credit cards and transition to making cash payments.

Individuals who avoid using credit cards tend to have a higher probability of being debt-free, showcasing financial discipline, and experiencing greater satisfaction compared to those reliant on credit cards. What are your thoughts on this stance?

No, using a credit card doesn't demonstrate your financial literacy, but using it wisely does. I don't really think getting rid of your credit card is the best solution for your debts. And I don't definitely think credit cards are the reason that you become a debtor, but your carelessness and ignorance are. When you don't know how to control and make good decisions for yourself, then why are you blaming technology? It's like a "blaming the victim" situation. So if you want to use your credit card properly, then learn how to use it, or you will blame your credit card again. The only solution for this is to just learn and don't take what you can't return. And I strongly believe a credit card is like a friend and a solution for me if you use it properly.