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Justin Kissel
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« on: January 29, 2010, 08:30:10 PM »

I'm curious about these new-fangled things they just came out with, called credit cards. I guess I took after my grandparents in that I have never had one, because they seemed to be more trouble than they were worth. I'm guessing if you get a card for a store (e.g. J.C. Pennies) that it gives you some kind of benefits, like 10% off purchases or something? But what benefits are there in having, say, a Visa credit card? What exactly does it do, that a Visa debit card can't? I suppose it might make shopping around the holidays a little easier, as you wouldn't have to budget your money months ahead of time, but wouldn't you still have to budget money in the months after to pay it down anyway? It just seems like, with the interest rates and all, it's just better to be without them. Am I missing something?
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« Reply #1 on: January 29, 2010, 08:56:44 PM »

I'm curious about these new-fangled things they just came out with, called credit cards. I guess I took after my grandparents in that I have never had one, because they seemed to be more trouble than they were worth. I'm guessing if you get a card for a store (e.g. J.C. Pennies) that it gives you some kind of benefits, like 10% off purchases or something? But what benefits are there in having, say, a Visa credit card? What exactly does it do, that a Visa debit card can't? I suppose it might make shopping around the holidays a little easier, as you wouldn't have to budget your money months ahead of time, but wouldn't you still have to budget money in the months after to pay it down anyway? It just seems like, with the interest rates and all, it's just better to be without them. Am I missing something?

While a few debit cards have perks when used as credit cards, this is relatively rare and the perks aren't as good as those for credit cards which can give you every thing from free flights to free gas to money back. That's the responsible use of credit cards, but they have other uses too such as identity theft or running up a balance before filing for bankruptcy. Wink
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« Reply #2 on: January 29, 2010, 09:36:38 PM »

I'm curious about these new-fangled things they just came out with, called credit cards. I guess I took after my grandparents in that I have never had one, because they seemed to be more trouble than they were worth. I'm guessing if you get a card for a store (e.g. J.C. Pennies) that it gives you some kind of benefits, like 10% off purchases or something? But what benefits are there in having, say, a Visa credit card? What exactly does it do, that a Visa debit card can't? I suppose it might make shopping around the holidays a little easier, as you wouldn't have to budget your money months ahead of time, but wouldn't you still have to budget money in the months after to pay it down anyway? It just seems like, with the interest rates and all, it's just better to be without them. Am I missing something?

What do I think of credit cards...

Proverbs 22:7 The rich rules over the poor,
         And the borrower becomes the lender's slave.
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« Reply #3 on: January 30, 2010, 12:40:07 AM »

I'm curious about these new-fangled things they just came out with, called credit cards. I guess I took after my grandparents in that I have never had one, because they seemed to be more trouble than they were worth. I'm guessing if you get a card for a store (e.g. J.C. Pennies) that it gives you some kind of benefits, like 10% off purchases or something? But what benefits are there in having, say, a Visa credit card? What exactly does it do, that a Visa debit card can't? I suppose it might make shopping around the holidays a little easier, as you wouldn't have to budget your money months ahead of time, but wouldn't you still have to budget money in the months after to pay it down anyway? It just seems like, with the interest rates and all, it's just better to be without them. Am I missing something?

What do I think of credit cards...

Proverbs 22:7 The rich rules over the poor,
         And the borrower becomes the lender's slave.

 I was thinking something along the same lines.  Should've known Scripture could beat me to it and say it much better.  Smiley

 I shake my head and laugh at all those credit card commercials.  There are a few now that actually pretend to save you money by spending money you don't have in the first place.  What frauds!  What dupes!  Credit card companies charge exorbitant fees, and can raise those fees just because they can!  Sure, there are low apr's available, but even then if you pay the minimum amount, it'll take you twice as long and twice as much to pay off what you borrowed. 

 Of course, for every rule there's an exception.  When life throws you a curve ball, say your transmission goes out etc..., well, most people unfortunately don't think about these things and fail to put money aside and therefore need a credit card.  But by and large, credit card usage is legal fraud against borrowers and just an all around rip off.  Free money?  Free anything?  Puh-lease.
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« Reply #4 on: January 30, 2010, 12:42:54 AM »

Schools should really teach basic finance as a life skill, maybe then people could fathom how to properly use a credit card these days.
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« Reply #5 on: January 30, 2010, 02:09:40 AM »

If you've never had a credit card, and have been disciplined thus far in life to live without one, my advice, DON'T GET ONE! Run away! Run away! Retreat! Retreat!

They're like the white rabbit in Monty Python's "Holy Grail" -- looks cute and furry then goes after your throat!
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« Reply #6 on: January 30, 2010, 10:05:33 AM »

First there is nothing "free" from credit cards. The merchants are paying around 5% (sometimes more) for transaction fees on every purchase. That of course is passed on to the buyer. So you pay 10 cents to get a 1 cent "bonus". Studies also show that people will spend more with a credit card than with other payment types, so merchants love them. A number of fast food chains started accepting the cards after pilot studies showed huge differences in what someone would buy with credit as compared to cash.

I have stopped using credit cards and have discovered that now I have more money to spend. I found out that if I could not afford to buy something for cash I sure could not afford to buy it with a 12% interest charge added on.
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« Reply #7 on: January 30, 2010, 10:50:13 AM »

My wife and I are using credit cards all the time. We are so used to them that we almost never have any cash in our pockets or wallets, and quite often no cash at home. It can be very embarassing, for example when my colleagues at work are contributing small amounts of cash to buy a gift for someone, etc. One time, my car broke down and I called a taxi cab to get home from work; it turned out that the cab driver took only cash, and I had no cash with me, and we did not have any cash at home. The cab driver waited for some 15 minutes or so as my wife and I desperately searched our house for dollar bills.

It's amazing how it all started: when we just came to the US, in 1990-1991, we could not get a credit card because we had no credit history. Only when we bought our first car, in April 1992, we were finally given a credit card by one Seattle bank. Our life seemed to become a lot easier since then, because we became able to buy things like air plane tickets, etc. by phone or (later) via the Internet.

It's very bad, I know. It's sinful to participate in this huge system of organized bloodsucking usury. I believe that when I am using a credit card, I am really breaking one of our Lord's commandments, so it's not really different from murdering, stealing, committing adultery, etc. But I cannot imagine, just how could we abandon using credit cards. My wife will never agree with that - she has no time at all for shopping (except groceries), and she always buys things that we need for home, and her clothing items, from QVC by credit card transactions. Lord, have mercy on us...
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« Reply #8 on: January 30, 2010, 01:25:31 PM »

My wife will never agree with that - she has no time at all for shopping (except groceries), and she always buys things that we need for home, and her clothing items, from QVC by credit card transactions. 

Why not just use a debit card? Like you, I rarely have cash on me, but I use my debit card all the time.

After learning (the hard way) the damage credit card debt can wreak, I'm striving towards living a credit card free life. Smiley
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« Reply #9 on: January 30, 2010, 02:00:55 PM »

There's a proper way to use a credit card--

Don't get one.

Yeah, I know, I know. I actually have one, I pay the balance in full every month, but seeing as how I was doing fine paying for things without a credit card, having one is superfluous.

My mom begged me to get one in order to establish a "credit history," but the problem with today's economy is that too many dang things are bought on credit/debt/loans and I don't get the ethos of paying for things on time now so you can be irresponsible in the future. When you do the math, paying for things in full is cheaper than paying monthly since in the latter case interest is involved.

Finance hasn't changed in millennia, people only think it has. Spend less than you earn every month, repeat over several years, and you'll be surprised at how "rich" you've become.
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« Reply #10 on: January 30, 2010, 02:16:33 PM »

Spend less than you earn every month, repeat over several years, and you'll be surprised at how "rich" you've become.

 I'm sympathetic to those who would say, "That's easier said than done!", but truly, your formula is both wise and savvy.  Dave Ramsey likes to say, "Debt is normal, so be weird!"
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« Reply #11 on: January 30, 2010, 03:58:49 PM »

In the UK, there are two main benefits:

If you have a credit card and pay if off on time each month, your credit rating goes up (because you prove you are a good, responsible borrower. This helps you get a mortgage).

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection. But I've never bought anything expensive enough to find this out.

Personally, I think credit cards are great if, like me, you're disorganized and have cash-flow problems - they can tide you over for a few days if you forget to top up your current account. But they are a very bad way of borrowing money, much better to pay them off each month on time, so you never have to pay interest.
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« Reply #12 on: January 30, 2010, 04:10:20 PM »

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection. But I've never bought anything expensive enough to find this out.
Just the ability to purchase things online is a huge benefit of credit cards (I refuse to hook up a paypal account to a bank account).  I personally do not enjoy shopping (except on very few occasions), so the ability to not have to go to a mall/store and deal with the ravenous masses...  absolutely fantastic.
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« Reply #13 on: January 30, 2010, 04:15:34 PM »

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection. But I've never bought anything expensive enough to find this out.
Just the ability to purchase things online is a huge benefit of credit cards (I refuse to hook up a paypal account to a bank account).  I personally do not enjoy shopping (except on very few occasions), so the ability to not have to go to a mall/store and deal with the ravenous masses...  absolutely fantastic.

Do you not have debit cards you can use online? That's unusual isn't it?
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« Reply #14 on: January 30, 2010, 04:35:42 PM »

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection. But I've never bought anything expensive enough to find this out.
Just the ability to purchase things online is a huge benefit of credit cards (I refuse to hook up a paypal account to a bank account).  I personally do not enjoy shopping (except on very few occasions), so the ability to not have to go to a mall/store and deal with the ravenous masses...  absolutely fantastic.

Do you not have debit cards you can use online? That's unusual isn't it?

We are the heaviest debit card using nation in the world, yet e-commerce with debit cards has yet to catch on here as a significant portion of the market.  What else is new, North American is always painfully behind the Europe and parts of Asia in accepting and implementing a number of technological conveniences.
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« Reply #15 on: January 30, 2010, 04:38:02 PM »

There is no difference in the protection offered between a debit and credit card. You are not responsible for fraudulent charges. Credit scores are not a measure of your integrity or your level or responsibility. They are a measure of how much money the credit industry can expect to make off of you. People who are very responsible, very rich but not in debt can have a very bad score.

The idea that you can stay disorganized and use credit cards to buffer your finances is the goal of the credit card company. It is amazing how rich you can become with just a little self control and effort.
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« Reply #16 on: January 30, 2010, 04:41:03 PM »

There is no difference in the protection offered between a debit and credit card. You are not responsible for fraudulent charges. Credit scores are not a measure of your integrity or your level or responsibility. They are a measure of how much money the credit industry can expect to make off of you. People who are very responsible, very rich but not in debt can have a very bad score.

The idea that you can stay disorganized and use credit cards to buffer your finances is the goal of the credit card company. It is amazing how rich you can become with just a little self control and effort.

Er ... why does using debit cards make you richer?! I really don't see the difference between using a credit card you pay off each month, and using a debit card - except that the credit card helps your credit rating. This is surely likely to make you better off, given the chances of getting better terms on a mortgage.
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« Reply #17 on: January 30, 2010, 04:58:45 PM »

Er ... why does using debit cards make you richer?! I really don't see the difference between using a credit card you pay off each month, and using a debit card - except that the credit card helps your credit rating. This is surely likely to make you better off, given the chances of getting better terms on a mortgage.

Because with a debit card you can't spend money you don't have. And despite claims that I hear about "paying it off every month", the industry says that only a tiny percentage are able to do that. I worked for a credit card processing company and I am sure that they were making good money on interest payments.

I don't know about everywhere but the best terms I can get on a Mortgage don't even involve my credit score. In fact I have gotten better terms by closing off unused credit card accounts in the past. The companies that tell you such things are trying to take your money and put it in their pockets. They want you to believe that you need them.



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« Reply #18 on: January 30, 2010, 05:03:00 PM »

Er ... why does using debit cards make you richer?! I really don't see the difference between using a credit card you pay off each month, and using a debit card - except that the credit card helps your credit rating. This is surely likely to make you better off, given the chances of getting better terms on a mortgage.

Because with a debit card you can't spend money you don't have. And despite claims that I hear about "paying it off every month", the industry says that only a tiny percentage are able to do that. I worked for a credit card processing company and I am sure that they were making good money on interest payments.

I don't know about everywhere but the best terms I can get on a Mortgage don't even involve my credit score. In fact I have gotten better terms by closing off unused credit card accounts in the past. The companies that tell you such things are trying to take your money and put it in their pockets. They want you to believe that you need them.



See what you mean - mind you, what it comes down to either way is how careful you are with money, not the technology. It's up to you, Asteriktos Smiley
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« Reply #19 on: January 30, 2010, 06:59:39 PM »

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection. But I've never bought anything expensive enough to find this out.
Just the ability to purchase things online is a huge benefit of credit cards (I refuse to hook up a paypal account to a bank account).  I personally do not enjoy shopping (except on very few occasions), so the ability to not have to go to a mall/store and deal with the ravenous masses...  absolutely fantastic.

Do you not have debit cards you can use online? That's unusual isn't it?

We are the heaviest debit card using nation in the world, yet e-commerce with debit cards has yet to catch on here as a significant portion of the market.  What else is new, North American is always painfully behind the Europe and parts of Asia in accepting and implementing a number of technological conveniences.

With the exception of renting a car, I've always been able to use my debit card in the same situations I would use a credit card. This includes online purchases.
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« Reply #20 on: January 31, 2010, 01:42:56 AM »

Sadly, credit and debit cards are a neccesary evil. Try to book a flight or train ticket, reserve a hotel room or shop online without one. the key is to be careful and not spend money you don't have.

These two segments of Frontline are very good (but somewhat frightening!)


http://www.pbs.org/wgbh/pages/frontline/creditcards/view/

 

http://www.pbs.org/wgbh/pages/frontline/shows/credit/view/
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« Reply #21 on: January 31, 2010, 02:24:04 AM »

Credit card are a terrible, terrible thing.  When I first went to college, I was bombarded with them and ended up getting 8!  Yes, these companies chose to give an unemployed college kid 8 credit cards.

At the time I was so poorly trained in economics that I had absolutely no clue as to how interest rates worked.  I thought that the idea of getting all these cards was a little off (I assumed that you had to have collaterial of some kind in order to have credit).  However, it was trendy thing to do and I blissfully went along with the companies who constantly solicited my business.

Needless to say, things did not turn out well for me at all.

I suppose that I do share a lions share of the blame for filling out the 8 applications for these cards in the first place, but what about the companies that deliberately preyed upon me and gave me these cards?  I told them in the applications that I was an unemployed college student who owned nothing of any worth or value.  Yet they still gave me that cards and thousands of dollars of credit to go with them.  This credit didn't mean anything to me at the time.  I had never held down a serious job or had a savings account of any kind.  It was just as if these companies had decided to give me thousands of dollars of invisible money for my pleasure.  I never saw a dollar of actual cash, it was all so surreal to me.  I wish now that I had never seen a credit card in my life but we cannot change the past.

On a positive side, I did buy a lot of nice Ikon's and Orthodox books with one of the cards so its not as if I used them all for hedonistic pursuits like so many youth do.

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« Reply #22 on: January 31, 2010, 09:52:08 AM »

My wife will never agree with that - she has no time at all for shopping (except groceries), and she always buys things that we need for home, and her clothing items, from QVC by credit card transactions. 

Why not just use a debit card? Like you, I rarely have cash on me, but I use my debit card all the time.

After learning (the hard way) the damage credit card debt can wreak, I'm striving towards living a credit card free life. Smiley

You are right. We recently got a debit card and we are now using it. Maybe it's a good beginning.
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« Reply #23 on: February 04, 2010, 05:30:35 PM »

But I cannot imagine, just how could we abandon using credit cards.

It's actually easier than you think. The hardest part is actually making the decision. Well, that and getting through the first few weeks. It's a lot like quitting smoking. When you get over the withdrawal, you wonder how you could waste your money on something stupid like that.
We haven't had any credit cards at all in seven or eight years now. I was totally amazed at how much money we actually had, and since both my husband and I work for non-profit organizations we're not well-off by any means.
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« Reply #24 on: February 04, 2010, 05:56:50 PM »

It's actually easier than you think. The hardest part is actually making the decision. Well, that and getting through the first few weeks. It's a lot like quitting smoking. When you get over the withdrawal, you wonder how you could waste your money on something stupid like that.
We haven't had any credit cards at all in seven or eight years now. I was totally amazed at how much money we actually had, and since both my husband and I work for non-profit organizations we're not well-off by any means.

Do you use a debit card Katherine? I think I could quite easily switch to one since the only thing I use my credit card for is online purchases, (and living and working in a rural area, that's a handy thing to be able to do!)
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« Reply #25 on: February 04, 2010, 06:31:29 PM »

But I cannot imagine, just how could we abandon using credit cards.

We're trying to not only reduce/remove Credit Cards from our life, but any form of credit altogether.  A godfather of mine never uses credit - pays "cash" for everything, including house, car, etc.  He's never had a great job, which was actually his rationale.  And, unlike the rest of us, he actually pays the "sticker" price for what he buys, instead of sticker + interest. Unfortunately, self-denial is difficult, and I think that's what keeps most of us (like myself) from dropping credit altogether. 

But, in a detached analysis, credit is ludicrous.  Paying $250,000 for a $100,000 house?  That's what you'll do on a long-term mortgage.  Paying $60,000 for a $35,000 car that will only be worth $18,000 once your payments are done?  That's what many people do with their purchase plans. But who wants the alternative?  Who wants to rent an apartment or house "below one's means" for years until they have the money to purchase one?  Who wants to buy a series of old, used cars while saving for a newer one?
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« Reply #26 on: February 04, 2010, 07:49:36 PM »

Schools should really teach basic finance as a life skill, maybe then people could fathom how to properly use a credit card these days.
There are alot of things that schools should teach that they don't, like formal logic.
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« Reply #27 on: February 05, 2010, 11:05:32 AM »


Do you use a debit card Katherine? I think I could quite easily switch to one since the only thing I use my credit card for is online purchases, (and living and working in a rural area, that's a handy thing to be able to do!)

Yes, we use a debit card, and it works quite well. We haven't had any problem with rental cars or hotels or the like which usually require a credit card. We do keep an eye on it however, checking the transactions - we've only had one instance of a "double" transaction and the bank took care of it immediately.

Another eye-opener is to keep track of every single time you spend money for a week. I was surprised, shocked, appalled at how much it added up!

It's a peculiar thing, but I am really reluctant to let go of any "real money" in my wallet. I become quite stingy!
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« Reply #28 on: February 05, 2010, 04:19:21 PM »

I will admit that I can think of a situation that almost required a credit card in my life recently. When I went to the funeral home after Mary passed, they would not allow me to set up a payment plan. They said that too many people had done that and then never paid the bill. Thankfully both my family and Mary's family were quick to help me cover the costs, because I sure didn't have the kind of money they were asking for, especially with it being like 10 days after Christmas. But if I didn't have family to help out, probably using a credit card would have been my only other option (if I had one).
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« Reply #29 on: February 05, 2010, 04:20:55 PM »

Benefits of credit cards:
  - Fraud protection: You can dispute charges made by stealing your card number. Not possible with a debit card.
  - Improved credit score: If you have a high credit limit, and rarely reach that limit (very likely if you're paying it off every month), your credit score will rise. Debit cards do not affect your credit score positively (and it is possible for it to lower your credit score if you overdraw your account).

The risks of credit cards have already been well stated. I need not mention them again.
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« Reply #30 on: February 05, 2010, 05:12:43 PM »

I'm amused that no one has mentioned the obvious difference between credit and debit cards:

Debit cards remove cash from your account immediately. Credit cards get paid every billing cycle (no cash going out when I swipe my card). I would argue that the problem with everyone who complains about the evil credit companies is that they have no self-control and no ability to manage their personal finances. I have credit cards, I use them all the time for everything. Guess what.... I pay them off every month and have never once even come close to my credit limit. What a credit card does allow me to do is shift money around to take advantage of higher interest rates in a temporary account and then shift the money back when needed to pay for the card.

Net effect:

I pay $0.00 in interest and I make almost 3% in interest on the money I moved out of my account temporarily. Oh yea, forgot to mention the $25 gift cards everytime I spend $2,500 and the $100 off plane tickets for having 10,000 points.... But I guess all you cash payers don't want free gifts.... Suit yourselves, but I'll continue to use my credit cards over and over till I can't afford to use them anymore.

-Nick
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« Reply #31 on: February 05, 2010, 05:17:10 PM »

I'm amused that no one has mentioned the obvious difference between credit and debit cards:

Debit cards remove cash from your account immediately. Credit cards get paid every billing cycle (no cash going out when I swipe my card). I would argue that the problem with everyone who complains about the evil credit companies is that they have no self-control and no ability to manage their personal finances. I have credit cards, I use them all the time for everything. Guess what.... I pay them off every month and have never once even come close to my credit limit. What a credit card does allow me to do is shift money around to take advantage of higher interest rates in a temporary account and then shift the money back when needed to pay for the card.

Net effect:

I pay $0.00 in interest and I make almost 3% in interest on the money I moved out of my account temporarily. Oh yea, forgot to mention the $25 gift cards everytime I spend $2,500 and the $100 off plane tickets for having 10,000 points.... But I guess all you cash payers don't want free gifts.... Suit yourselves, but I'll continue to use my credit cards over and over till I can't afford to use them anymore.

-Nick

Admiralnick, I mentioned this.

In this thread, many people have described bad things about credit cards that are in fact, simply bad things about people. If you can't afford something, don't buy it. If you are too disorganized to make a payment on time, don't do it. These two statements are good advice whether or not you have a credit card. In my opinion, blaming one's own failures on the available technology is at best naive, and at worst lazy and obnoxious.

Credit cards can be very useful; they should not be abused, like most other technologies. End of story.
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« Reply #32 on: February 05, 2010, 07:39:33 PM »

Y, Nick, Liz: I don't actually care all that much about risks and benefits of credit cards. I just don't think about those things, or think about them rarely and not for a long time. What bothers me is the moral, religious, Christian side of my participation in what is a clear-cut usury (i.e. a sin condemned by the Bible). Why don't we begin to discuss risks and benefits of promiscuous sex, or stealing? Usury is not any better than those activities...

Christ actually said, "give, and ask nothing in return." He was not only against usury, but even against his followers asking to return the exact sum they would give...
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« Reply #33 on: February 05, 2010, 07:53:35 PM »

I think I've mentioned it before, but growing up as a child, my family was in contact with a small Christian religious group which had a rule against usury. Members were forbidden to accept any interest from the banks, and all the older members gave interest-free loans to younger members to get established. The entire community looked out for one another financially. Perhaps you know of other Christian churches with this rule, but this is the only one of which I am aware which literally refused the bank's interest.
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« Reply #34 on: February 05, 2010, 07:56:51 PM »

I think I've mentioned it before, but growing up as a child, my family was in contact with a small Christian religious group which had a rule against usury. Members were forbidden to accept any interest from the banks, and all the older members gave interest-free loans to younger members to get established. The entire community looked out for one another financially. Perhaps you know of other Christian churches with this rule, but this is the only one of which I am aware which literally refused the bank's interest.

That's what I should be doing....  Angry
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« Reply #35 on: February 05, 2010, 08:07:38 PM »

Quote
That's what I should be doing....  


My father, who was quite unabashedly fond of usury, would often wonder how this sort of system of refusing interest actually worked in reality....

I know you meant that forgoing interest is what you should be doing, Heorhij,  but the thought of you being a member of this particular corner of christendom I find highly amusing. Not to say that they weren't very intelligent, ingenious folks in their own right...

What would be interesting to me would be to determine whether Old Believers have a position on the matter. Where is our resident Old Ritualist expert when we need him?  Smiley
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« Reply #36 on: February 06, 2010, 12:22:03 AM »

I'd be very hesitant in using any kind of bank/checking card over the internet or on an everyday basis. The main reason is protection from fraud. If fraud does occur you are way better off having it happen to your credit card "(Banks problem)" instead of "(your problem)" check card. It could take literally months to get your money back. As far a usury is concerned, and I'm saying this with tongue in cheek. Borrowing is a function of the economy as a whole and not one person in particular. Even when taxes are payed most of them are used to pay for interest on bonds that were purchased by the municipality. There is just no way of escaping interest unless you move to a different county and live off the land as a hermit. What scares me more than usury is the way currency is handled these days without backing. I fear that our currency is the biggest Ponzi scheme of them all.
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« Reply #37 on: May 14, 2010, 03:25:28 PM »

Quote
That's what I should be doing.... 


My father, who was quite unabashedly fond of usury, would often wonder how this sort of system of refusing interest actually worked in reality....


This is an interesting discussion and no one has yet mentioned that in Islam, usury is forbidden (interest is called Riba). They actually have interest free loans and mortgages and it is quite interesting how it works. In my economics coursework we studied it a little bit but it's been awhile, so I'm not so well-versed in the subject to explain it here.
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« Reply #38 on: May 14, 2010, 04:08:48 PM »

Credit card protection (eg. if you buy over the net and get scammed) is, I believe, better than Debit card protection.
Indeed.  As a recent victim of credit card fraud, I can attest to this.  Had it been a debit card, I'd have been out the money up front and been fighting the bureaucracy to get my money back.  As it was, all I had was a bill, which I disputed.  The credit card company, if they wanted their money, was going to have to fight me for it, not the other way around.
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« Reply #39 on: May 14, 2010, 04:23:54 PM »

But, in a detached analysis, credit is ludicrous.  Paying $250,000 for a $100,000 house?  That's what you'll do on a long-term mortgage.
It isn't quite so ludicrous when you consider the money you'd have paid on rent in the 15 or so years you'd have been saving to pay cash.  In that case, the mortgage holder comes out ahead, especially considering the inflated price you'd have now paid for the same house.


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« Reply #40 on: May 14, 2010, 07:20:05 PM »

I do not have a credit card anymore. After my divorce, I only make approx $25,000/year  (US). Did use my debit card to order some books online thru amazon last year. Ended up with over $700 dollars being withdrawn out of my checking account. Bank traced it to a place in India, and it was fraud. Closed account, got rid of debit card, my bank, (small comunity owned, everyone knows everybody), refunded me the money. Yes, I have gotten and paid off a car without the use of either,(yeah baby!) Passed credit reports without either.I do have a reloadable "debit" card I can use if I want to order something online that I absolutely can not get any other way, only did it twice in last 8 months) Funny thing is, even though I  only make 25 thou gross, and no debit or credit card, going to cash and well thought out spending, I now have enough saved to pay all my monthly expenses for at least 7 months, and enough to spoil my grandkids a couple times a month on fun stuff. It is only hard in the beginning, now I would never go back to using a credit card/debit card. (And yes, I can travel now, couldn't use to, didn't have the money cause of the monthly credit card payments).  It works for me and what is actually important to me.
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