First, it is free money. For 9 years, since I was a college senior, I have had exactly two credit cards, a Discover and a Chase Visa. Two months ago Chase switched me to a Mastercard but that is the only change, I still have those same two cards. I started with paltry credit limits and now I've got insanely high credit limits.
And in 9 years, I have paid a total of FIFTY CENTS in service charges and interest. And I have received many hundreds of dollars, probably over $1,000, in cashback bonuses. I bought a truck a few weeks ago. I put the whole thing on my Discover. That purchase alone will give me $110 in free money at the end of the year.
It is easier to rent a car and get hotel rooms with a credit card than with a debit card. Why? Damned if I know - but it's true.
Also, you build a credit rating. There are two different kinds of credit, good credit and bad credit. When you use a credit card and you keep paying your bills on time, you build good credit. When you have no credit card, you get no credit.
If you don't have good credit you might not get approved for a mortgage - keep in mind that your last name is not Bush :-) And if you don't get a mortgage then you're paying rent and not building equity. And that means you'll be a serf for the rest of your life.
And you know by now how I feel about being a serf. EARLY RETIREMENT GOOOOOOOOOD.
Good point. If you rent you can put your stuff in storage and take a sabbatical. If you buy it may be a bad time in the market to sell just when you need to sell. Also I think you get taxed on your profit from selling a house, if you don't buy another one soon afterwards. There is a concept called 'negative equity' which is when you owe more money on your house than you could sell it for. This happened to a lot of people in Britain in the last recession after Thatcher encouraged people to buy their own homes rather than rent. When US house prices start dropping (soon?) a lot of people who got 100% and 125% mortgages are going to be very sorry.
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Credit card GOOD, dependence on them BAD
First, it is free money. For 9 years, since I was a college senior, I have had exactly two credit cards, a Discover and a Chase Visa. Two months ago Chase switched me to a Mastercard but that is the only change, I still have those same two cards. I started with paltry credit limits and now I've got insanely high credit limits.
And in 9 years, I have paid a total of FIFTY CENTS in service charges and interest. And I have received many hundreds of dollars, probably over $1,000, in cashback bonuses. I bought a truck a few weeks ago. I put the whole thing on my Discover. That purchase alone will give me $110 in free money at the end of the year.
It is easier to rent a car and get hotel rooms with a credit card than with a debit card. Why? Damned if I know - but it's true.
Also, you build a credit rating. There are two different kinds of credit, good credit and bad credit. When you use a credit card and you keep paying your bills on time, you build good credit. When you have no credit card, you get no credit.
If you don't have good credit you might not get approved for a mortgage - keep in mind that your last name is not Bush :-) And if you don't get a mortgage then you're paying rent and not building equity. And that means you'll be a serf for the rest of your life.
And you know by now how I feel about being a serf. EARLY RETIREMENT GOOOOOOOOOD.
Re: Credit card GOOD, dependence on them BAD
Date: 2002-07-12 10:04 pm (UTC)Re: Credit card GOOD, dependence on them BAD
Date: 2002-07-13 04:42 pm (UTC)There is a concept called 'negative equity' which is when you owe more money on your house than you could sell it for. This happened to a lot of people in Britain in the last recession after Thatcher encouraged people to buy their own homes rather than rent. When US house prices start dropping (soon?) a lot of people who got 100% and 125% mortgages are going to be very sorry.