Does Using a Credit Card Demonstrate Financial Literacy?

[bayu7adi]

Having a Credit Card (CC) is a responsibility, the main concept of the CC is just a pay later if you think on yourself that you are capable of paying those things you swipe with your CC you do not need to worry about the due, reason why there's a lot of people scared with the CC is they mishandle their cards properly they as always late with the due date cause another penalty every due date they missout lend to the number of increasing of penalties they need to pay, but if you are a responsible holder for sure you will enjoy the perks of using the CC.

Sure, credit cards have their own unique purposes and markets. We can't force a busy entrepreneur who's caught up in meetings and evaluating their company's sales to carry around cash. Credit cards play a central role when used by the right people and in a smart way. it might not be the best choice financially, but it can be a real time saver. Wealthy individuals already have a lot of money, and they need quick and simple transactions. it's like choosing a business class flight ticket, where your priorities are time and comfort.

When someone can make a lot of money quickly with a small job, they can focus on making more money using their credit card. Yes, you can save time and be efficient with a credit card.

For those who don't have much money, it's essential to consider alternatives to credit cards... because it can turn into a financial disaster if not use a credit card wisely.

[YUriy1991]

For those who don't have much money, it's essential to consider alternatives to credit cards... because it can turn into a financial disaster if not use a credit card wisely.

That right. Everything is a facility for making money and there are always definite advantages and disadvantages, it all depends on the purpose and use for what. If indeed we fall into the upper middle class category, I think it's safe because there are posts that can cover the monthly bills. But, if it is upside down, it's wise not to use it yet.

With a credit card we can also buy BTC As long as we find an exchange that supports our country. Apart from that, the security factor is also still vulnerable, where paying with a credit or debit card requires sending sensitive banking information which can be stolen.

[shield132]

It is all relative. Debt can be good sometimes. When the interest rates are lower than the interest rates, it is a brilliant idea to borrow money because the prices will go up in value faster than the interest you are going to pay. As long as you know what you are doing cc or cash can be better in different situations. People go nuts when they hear the word “debt” but they don’t know how amazon become that big. They paid no taxes because they borrowed so much money and made investments. That’s a loophole in the taxing system which everyone can take advantage of. There are two kinds of debt: Good debt and bad debt. If you are borrowing money to build something productive, then it is good debt.

Is there similar loophole in taxes in every country? Probably not. I have also never seen inflation higher than interest rates on debts because in my country agreement gives banks right to increase interest rate if inflation significantly grows.

However, when the others here started their tiny business, they did not have credit cards. They may not have been aware of financial literacy, but the fact that they have built their little business demonstrates that they are doing things that necessitate proper financial awareness in order to manage the firm they established.

They may not have been aware of financial literacy but they built business in a niche where they didn't have competitors. When this niche becomes mainstream niche and you have a company that started this niche and matured in this niche, then you'll naturally mature in financial literacy, like Amazon.

[Poker Player]

It is all relative. Debt can be good sometimes. When the interest rates are lower than the interest rates, it is a brilliant idea to borrow money because the prices will go up in value faster than the interest you are going to pay. As long as you know what you are doing cc or cash can be better in different situations. People go nuts when they hear the word “debt” but they don’t know how amazon become that big. They paid no taxes because they borrowed so much money and made investments. That’s a loophole in the taxing system which everyone can take advantage of. There are two kinds of debt: Good debt and bad debt. If you are borrowing money to build something productive, then it is good debt.

Is there similar loophole in taxes in every country? Probably not. I have also never seen inflation higher than interest rates on debts because in my country agreement gives banks right to increase interest rate if inflation significantly grows.

I don't know what happens in all the countries of the world, but in general, the legislation is similar. You don't pay taxes for taking a loan, otherwise nobody would do it.

As for the inflation issue, what happens is that the banks make a calculation. If you make a deposit they pay you less than inflation and if you ask for a loan they make you pay more than inflation. For these calculations they base themselves on recent history and on the rate policy forecast, but there are times when they cannot foresee a rise, as happened recently, when mortgages had been given at very low rates and because of the inflation crisis the central banks started to raise rates quickly. Then the borrower who borrowed at low interest rates came out ahead.

[mamesso]

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?

There are always positive and negative sides, including using credit cards for shopping. Although on the one hand having a credit card looks profitable, there are also negative impacts. You need to be more careful when using it because there have been many stories about how much negative impact there is due to not being aware of the amount of money spent due to all the convenience of making transactions with a credit card.
It seems so easy for someone to swipe a credit card without thinking about how much money they still have. This will cause debt to increase and ultimately make it difficult to pay it. It is easier for someone to control their finances when they shop using cash rather than a credit card. Using cash can also increase discipline in spending the money that has been allocated for living expenses in a month.

[mihaybus]

Strange title of the topic. When I was still at university, we were told that money from a credit card is easier to spend than cash.

It's human nature and psychology. You swipe your card, pay, then put it back in your wallet. You have no awareness that you “gave” something. With cash it's the opposite.

That is why the more powerful the “currency”, the easier it is to spend it. That is, it is easier to pay 2 euros than 200 rubles (and doesnt matter that it is the same in terms of exchange rate).

[blckhawk]

To some degree yes but for me to decide if they really are a financially literate person when it comes to using credit card, I think that I have to know how they use the credit card and how they can take advantage of it because there's an advantage to using credit cards especially if you know a few tricks to them. If they are using the credit wisely by paying the credit due on the right time to prevent interest rates from creeping in and maximizes on the perks of the credit card like airline miles then I would probably say that they're financially literate at the highest level in my opinion although I would still consider someone to be financially literate even if they don't maximize the perks of having a credit card, paying your credit card on time is still the most responsible thing that you can do.

[mirakal]

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.

Well, using debit card is probably more advisable if you don't have cash onhand rather than resorting into using credit card which if you have hard time on self-discipline, you will really cross your limits in your credit limit. The reason why I don't encourage everyone to use credit card because aside from high interest charges and credit card fees, the possibility to overuse it is very high.

Also, I couldn't agree less that using credit card demonstrates financial literacy. Otherwise, if that would be the sole basis, a lot of people will be drown into debt and become highly exposed into financial illiteracy instead.

[icalical]

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?

From my experience living in a country where credit card is not very common, I think the influence of credit card is not that significant, because even when most poeple around me are using only cash and/or debit card, they still spend their money recklessly. I think more important aspect is their environtment and peers, if we live in a remote area where there is not much thing to bought I bet we will spend our money more wisely. But when we ilve in big city, where there are so many accessible entertainment, tech and many other thing to be bought it will be easier to spend our money in all those things that we don't actually need.

[PrivacyG]

Strange title of the topic. When I was still at university, we were told that money from a credit card is easier to spend than cash.

It's human nature and psychology. You swipe your card, pay, then put it back in your wallet. You have no awareness that you “gave” something. With cash it's the opposite.

From personal life and experience.  I can confirm this is true.  When you pay with Cash you open up your Wallet and see how much there is left.  When paying with Card you do not always check how much there is left.  You just swipe the Card or touch the phone.  I am often surprised by my Card balance because I think I spend less when the opposite happens really.  Almost always it is that I spend over the limit I set.

[Hispo]

I believe people sometimes can over react or exaggerate the dependence people can have because they use of their credit cards, in my opinion. It is true that debt is undesirable, specially if makes one's life more difficult and we tell interests to accumulate, etc. But in the end a credit card is a tool and its efficacy or the harm it can do against us fully depend on the way we manage it.

Besides, are we supposed to ignore the fact creditors have imposed the system of credit score onto the population of the United States and most of the countries in Europe,etc? Someone who manages to live fully on cash will have not credit score, so they will likely have no chance to get a loan to buy a vehicle or a house, and there is when things get more complicated, because it is a completely different story to try to buy a house or a car fully with credit. Most of people cannot do so, that is for sure...

[LesterD]

Strange title of the topic. When I was still at university, we were told that money from a credit card is easier to spend than cash.

It's human nature and psychology. You swipe your card, pay, then put it back in your wallet. You have no awareness that you “gave” something. With cash it's the opposite.

From personal life and experience.  I can confirm this is true.  When you pay with Cash you open up your Wallet and see how much there is left.  When paying with Card you do not always check how much there is left.  You just swipe the Card or touch the phone.  I am often surprised by my Card balance because I think I spend less when the opposite happens really.  Almost always it is that I spend over the limit I set.

Maybe you are not responsible enough when it comes to using your credit card. Using a credit card was supposed to be an easy way to pay your purchases and bills. In terms of payment, if you have purchased an item, you can pay it immediately to avoid losing track of your purchases.  This way, you will never be surprised by your credit card bill. You just have to be responsible so you can enjoy the advantages of using a credit card.

[siniminomorocomunisakito]

For speed, credit cards will likely be fastest. It seems like your analysis is absolutely correct. If we really use a credit card, we get advantages from the features it contains, I don't think there's anything wrong with that, however, if it makes it difficult or we find it difficult to pay the bill later, it's better to just postpone that wish for a moment. When it's time to use it, I think.
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