Are Credit cards wise?

[uneng]

Snip

Many people who consider themselves smart use credit cards as an "opportunity," for example, to start a business, as banks position it. But this can be seen as a step toward a very risky venture, which many aspiring entrepreneurs don't fully understand. After all, that's what they're aspiring for. In the country where I live, banks offer 20 percent annual interest on business development loans. That's bad deal.
And if a novice user of such a credit card fails to do everything correctly, they'll become a major debtor to the bank.

I'm of the opinion credit cards should be only used if you are assured to be receiving money to pay the debt on the following month. There must be always a Plan B in mind, especially when venturing into a new business operation. Everything must be calculated most accurately as possible, and even in that case, there might be still nasty surprises.

Also, if there is interest or fees involved when dealing with credit card, it's totally discouraged. The more installments on the purchase, more likely it will be there will be extra interest to be paid, so it's important to pay in a number of installments which don't involve extra costs for the buyer.

[M47AK16]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I love them but I also hate them at the same time. I wish I could have lived a life where banks denied me credit cards, that way I would not have made any debt, and while that would have created its own chaos as well, at least I would have learned to live my own life.

Plus, I could always get loans when something urgent happens, and people do not take loans for simple stuff, like getting a new pc, or at least they shouldn't, I personally wouldn't. I would only take loans when I must take it, like life threatening stuff, otherwise I would have no debt at all. With credit cards, sometimes I feel lazy and even pay simple meal with it, like a burger, few dollars that's it, I know I shouldn't, but card is easier than carrying out cash.

[DrBeer]

As long as we have the money, why use a credit card? That's the question on my mind.

Basically to get free money. I guess you didn't even bother reading replies on the thread.

You pay for something you buy today 30-40 days later. In the meantime, the money that's already yours keeps earning interest for you.
You can also split purchases into installments. So instead of paying your debt right away, you keep earning interest on your money.
You earn bonus money from the card that can be used in your next purchase. You benefit from different campaigns. All of these give you a financial advantage.

You're asking the wrong question. If you have money, of course you use a credit card. The real trap is when you don't have money and still use a credit card.

I can understand what you mean. When we have money, we can use that money to generate profit for us, while we use credit cards to buy things.
Basically it makes sense, but not everyone is responsible with their credit card usage and debt is debt.
Maybe this is a difference in principle between each of us, because I have a principle that we should not create debt as long as we can still buy with our own money (except in urgent circumstances). Because debt can also become a habit and maybe even an addiction.

This is a very sound approach, but somewhat limited. I would expand on it:
If it is advantageous to buy with your own money, do so.
If it is advantageous to buy with interest-free installments, do so (you will save money due to inflation).
Always have a backup payment method handy — whether you've forgotten your money, are in a critical situation, or something else — you should always have a backup payment option. This includes cryptocurrency payments, so you should also have a mobile wallet.

[Yaunfitda]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I love them but I also hate them at the same time. I wish I could have lived a life where banks denied me credit cards, that way I would not have made any debt, and while that would have created its own chaos as well, at least I would have learned to live my own life.

Plus, I could always get loans when something urgent happens, and people do not take loans for simple stuff, like getting a new pc, or at least they shouldn't, I personally wouldn't. I would only take loans when I must take it, like life threatening stuff, otherwise I would have no debt at all. With credit cards, sometimes I feel lazy and even pay simple meal with it, like a burger, few dollars that's it, I know I shouldn't, but card is easier than carrying out cash.

It's boils down to control, if you are a first timer, then obviously, you feel proud of having a credit card because you feel privilege. But it's the worst of them all, specially if you are not that financially literate on how to handle credit cards. Because initially, you might want to used it and buy things that you "want". And then later when the banks started to ask you for that payment then that is the time that you wished you didn't apply or take that credit card because for sure pile of debts are going to be present specially if you have multiply credit cards. So it's somewhat a curse for having it, like in my case and it take me years to pay my debt all along and now I don't have any and if I wanted to buy something, everything should be in cash now.

[DrBeer]

Snip

Many people who consider themselves smart use credit cards as an "opportunity," for example, to start a business, as banks position it. But this can be seen as a step toward a very risky venture, which many aspiring entrepreneurs don't fully understand. After all, that's what they're aspiring for. In the country where I live, banks offer 20 percent annual interest on business development loans. That's bad deal.
And if a novice user of such a credit card fails to do everything correctly, they'll become a major debtor to the bank.

Banks don't force you to take out a loan, they say, “Hey, do you need money to grow your business? We have money, and we can give it to you at 20% interest.”
Then a SMART person takes it and calculates the business plan, income, expenses, considers the risks, and comes to the conclusion:
either “yes, I'm fine with a 20% annual commission, because with this money I will get a 320% profit for the year,”
or - no, the balance of income and expenses this year is such that it is not profitable for me to take money at 20% per annum

A STUPID person will rush and take such a loan without thinking twice.
The question is - who is to blame for such a stupid act? Definitely the bank?

[AgriTrack]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I love them but I also hate them at the same time. I wish I could have lived a life where banks denied me credit cards, that way I would not have made any debt, and while that would have created its own chaos as well, at least I would have learned to live my own life.

Plus, I could always get loans when something urgent happens, and people do not take loans for simple stuff, like getting a new pc, or at least they shouldn't, I personally wouldn't. I would only take loans when I must take it, like life threatening stuff, otherwise I would have no debt at all. With credit cards, sometimes I feel lazy and even pay simple meal with it, like a burger, few dollars that's it, I know I shouldn't, but card is easier than carrying out cash.

Everyone has their own perspective about the credit cards. I always prefer to run my expenses within my budget. I never used this for loan. For me, these are not helping tool but it can be  traping tool. They encourage people to use this for in any emergencies or when once people become used to it , then banks increase their interest rate. Credit cards system work for the benefit of the banks. They design all systems by knowing that majority will not pay back money on time so bank will earn more through interest rate. Or if someone pay back minimum amount than interest rate grow fast and create tension. Besides the interest rate they also charge annually fee or merchant fee.
My aim is not to put my thoughts on anyone. If you are good in handling the debt or able to return timely then credit cards useful for you but usually for short time

[Unknown Op]

Everyone has their own perspective about the credit cards. I always prefer to run my expenses within my budget. I never used this for loan. For me, these are not helping tool but it can be  traping tool. They encourage people to use this for in any emergencies or when once people become used to it , then banks increase their interest rate. Credit cards system work for the benefit of the banks. They design all systems by knowing that majority will not pay back money on time so bank will earn more through interest rate. Or if someone pay back minimum amount than interest rate grow fast and create tension. Besides the interest rate they also charge annually fee or merchant fee.
My aim is not to put my thoughts on anyone. If you are good in handling the debt or able to return timely then credit cards useful for you but usually for short time

Credit card has its own benefits because we can spend money with no headache and we will pay after that when we have money to pay and we can also pay no monthly but we have to pay interest on that . Many people want to enjoy their life by spending more money in life that is working for them and they are taking loan and they are enjoying their life and they are taking costly clothes and everyone should focus on both things because debit card has its worth and many people prefer debit card as comparison to credit card because they will not be in debit and they will spend the money which they have in there account. If they will spend more more money then they will be bankrupt which is not good for them and they want money in their pocket because these are middle class people who don't want to take debit in their life and they are happy with their current situation.

[bakasabo]

Depends on the country you are resident of, your wealth, your plans. If you want to build trust with bank - use credit cards, even though you have enough funds. Some use cards to divide financial load on a person. There are people who use credit cards only to get bonuses (for example people get exclusive discounts, I used to receive movie tickets each quarter for having a card). Sure enough there are people who want to have more than they can allow, and they become infinite debtors.

[Shishir99]

A STUPID person will rush and take such a loan without thinking twice.
The question is - who is to blame for such a stupid act? Definitely the bank?

LOL.
I see how some people actually blame the bank for it. But the reality is different. There is no benefit in blaming the bank. The bank is here to do its business, and we are its customers. Banks give credit cards and loans so they can make money. For the credit card loans, they don't care about the purpose of your spending. They allow you to spend money as long as your card has a limit. Customers could choose to use it wisely or waste their money buying shitty things. There is no way why people should blame the banks for their own mistakes or misuse of the credit card.

[TheUltraElite]

There are people who use credit cards only to get bonuses (for example people get exclusive discounts, I used to receive movie tickets each quarter for having a card).

However just for getting those bonuses, credit cards should not be the only method. Spending needs to be controlled if buying on credit and paying the bill or time should be the first priority. When a card is active, it provides a lot of benefits for its owner. Free movie tickets might be part of it, but the popcorn and drinks will defenitely not, so again check where you are spending money, 2-3 popcorn boxes might end up costing similar to the seat price.

That is how these companies make money, by luring you into buying things that you cannot live without or you cannot stop yourself from buying.

[HONDACD125]

LOL.
I see how some people actually blame the bank for it. But the reality is different. There is no benefit in blaming the bank. The bank is here to do its business, and we are its customers. Banks give credit cards and loans so they can make money. For the credit card loans, they don't care about the purpose of your spending. They allow you to spend money as long as your card has a limit. Customers could choose to use it wisely or waste their money buying shitty things. There is no way why people should blame the banks for their own mistakes or misuse of the credit card.

Some people will always look for excuses to blame others for their mistakes, they do this for gambling as well, where if they lose a large amount, they start blaming the casino, making excuses like the game wasn't working well, or they faced a glitch which caused them to lose that much money, but they won't accept their own mistake that they use the money to try and make a lot of money from it, but their luck didn't work, and they lost the money, and now they are ashamed of what they did which is why they can't accept it now.

When it comes to credit cards and the credit provided to the customers, it's true that people often spend their credits on unnecessary things only because they have the opportunity to spend money even if they don't have money at the moment, and then they spend all their earnings only to repay the credit or loans they have taken using the credit card they have, and then they blame the bank or the financial system when they are actually misusing the system themselves and the tools they are provided for convenience.

[Shishir99]

Some people will always look for excuses to blame others for their mistakes, they do this for gambling as well, where if they lose a large amount, they start blaming the casino, making excuses like the game wasn't working well, or they faced a glitch which caused them to lose that much money, but they won't accept their own mistake that they use the money to try and make a lot of money from it, but their luck didn't work, and they lost the money, and now they are ashamed of what they did which is why they can't accept it now.

I have to agree with this comment.
I think we all have seen some scam accusations in this forum where the accuser tells us that they are a gambling addict, they got self-exclusion from a certain casino, and then created another account to play, made a deposit, and lost. Now, the casino is to blame because the player should not be able to create multiple accounts and play at their casino. The player simply forget the thing that they themself share the blame as well. They should not have created the multiple account and make a deposit which they cannot afford to lose. I hate those peoples.

[bakasabo]

There are people who use credit cards only to get bonuses (for example people get exclusive discounts, I used to receive movie tickets each quarter for having a card).

However just for getting those bonuses, credit cards should not be the only method. Spending needs to be controlled if buying on credit and paying the bill or time should be the first priority. When a card is active, it provides a lot of benefits for its owner. Free movie tickets might be part of it, but the popcorn and drinks will defenitely not, so again check where you are spending money, 2-3 popcorn boxes might end up costing similar to the seat price.

That is how these companies make money, by luring you into buying things that you cannot live without or you cannot stop yourself from buying.

Movie tickets were only one of examples. My credit card also provide me travelling insurance, cashback and I think some discounts at hotels (never used them). When I was taking a mortgage, getting one extra service from the bank was one of reasons why would they give me better % rate. I dont even feel that I am losing money with that card, as I often use it, and as soon as I get my salary, I instantly repay everything. I only benefit with it right now.

[MissNonFall9]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I am also not in favor of using credit cards. If you have the ability to pay off your credit card on time, you will be able to pay any expenses without using your credit card. Whatever there may be some strategic reasons for each individual. In that case using a credit card may be convenient for them.

[Fortify]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

Credit cards can be a very wise decision but you should definitely research and understand how they work before even attempting to take one out. They can often be misunderstood or even portrayed as free money by some people falsely representing them, sometimes for their own profit motives. There are several ways somebody can benefit - some offer rewards like a percentage cashback, some offer 0% finance on purchases for a certain time, others can even give 0% borrowing again for a fixed time limit which can act like a 0% loan if you treat it correctly. There are all sorts of perks that they can offer, but generally you should only use them if you have a steady income stream and know how to spend responsibility, otherwise they can become very dangerous to your finances.

[9ja Amaka]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I don't think that credit card it's bad, it depends on the individual. The main purpose of credit card is for you to use it when you run out of cash and it should be used wisely. Not because you have access to credit card, then you go on a spending spree. That's is very wrong. It should be used when you need to get something important and you run out of cash. I think the way some people use it that's why you feel it's bad. You have to learn to control your spending as an individual,  even if you are not using a credit card.

[Jateng]

Credit cards can be a very wise decision but you should definitely research and understand how they work before even attempting to take one out. They can often be misunderstood or even portrayed as free money by some people falsely representing them, sometimes for their own profit motives. There are several ways somebody can benefit - some offer rewards like a percentage cashback, some offer 0% finance on purchases for a certain time, others can even give 0% borrowing again for a fixed time limit which can act like a 0% loan if you treat it correctly. There are all sorts of perks that they can offer, but generally you should only use them if you have a steady income stream and know how to spend responsibility, otherwise they can become very dangerous to your finances.

credit card feels like an addictive thing. At first, companies attract customers by offering easy and convenient packages. They show many benefits and make it look helpful. People start using credit cards often, and after some time, it becomes a habit. Then the companies change their policies by increasing interest rates and adding extra charges to earn more profit. In the beginning it seems useful, but later it can create problems for the customer, especially when the debt becomes difficult to manage

[Yeesha]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

I can't said that credit card is unwise, because it does not have his own power, unless what an individual (the owner) order it to do. So, spending recklessly or lavishly is the person choice, and it doesn't concern the innocent credit card. So I didn't agreed with any of your statements. Withdrawal of any amount of money is based on individual's interest. The wisest person is he who control his credit card perfectly and spends money wisely without trying to impress any one.

Just like the OP said, nothing is permanent and we shouldn't overlook the fact that the table can turn anytime without our awareness, so it's really important to avoid anything that will make you bankrupt.

[Fortify]

credit card feels like an addictive thing. At first, companies attract customers by offering easy and convenient packages. They show many benefits and make it look helpful. People start using credit cards often, and after some time, it becomes a habit. Then the companies change their policies by increasing interest rates and adding extra charges to earn more profit. In the beginning it seems useful, but later it can create problems for the customer, especially when the debt becomes difficult to manage

In this case you are not mature enough to handle the financial responsibility, management and accountability that goes with it. That is not intended as any kind of insult, I didn't understand how they worked for a long time either or have the income to use them properly. For people that understand how they work and use them within the rules then they are very beneficial. However it requires discipline, because if you do not pay off the full balance every month then you will be stung by super high interest rates in comparison to other forms of credit. If you spend (aka borrow) $100 on a card, you must pay it off by the time the statement balance is due or you will be subject to high cost borrowing. These contracts are very clear and upfront, there is nothing sneaky about it. People who don't understand how it works may consider it free money and spend up to the limit without any intention to pay it back, those are the people that fall into the dangerous trap.

[Z_MBFM]

The use of credit cards for me is unwise. You are spending money that’s not even yours yet. How sure are you that you can pay for everything you are buying now? No matter how good your source of income is, nothing is permanent. Credit cards only force you to spend more than what you can. Agreed?

From my long experience of using credit cards, I can say that using credit cards is not always bad for us, but credit cards increase our expenses, when you go to spend cash from your own pocket, you will feel sorry for that money, but the thing about credit cards is that you are spending first and paying it later, due to which even though you feel bad when paying the money, when you shop, you will spend more than necessary. Credit cards should be used by those who are financially strong. Otherwise, using credit cards will only increase the amount of debt and it will slow down your life. You will not be able to be financially strong by getting into the cycle of paying off credit card dues.