|
I agree that credit cards CAN be evil, but they aren't evil if you pay it off every month and don't pay interest. It seems to me that people who have the discipline to save 3-6 months of expenses, then you also have the discipline to use your credit cards with restraint. If you think of credit card availability as cash availability, then you probably aren't a person who is able to save up 3-6 months of expenses. There are situations where using your debit card can severely limit your available cash flow, especially if you have to travel for work. Scenario: You are staying at a hotel for work and when you check in, they put a certain dollar amount on hold as pending, for incidentals. I've had this amount be as much as $50 a day. So you're there Sunday-Friday and they've put your hotel bill plus this pending $250 on your bill. You had to rent a car too and they put a $300 deposit hold on the car, even though the total rental bill is $150.00 for the week. So there, you have $400, plus your $900.00 hotel bill and your $150.00 car bill all coming out of your checking account but it won't be reimbursed for a couple weeks.
The next week, same thing, different city. So by now, you've got $3000 of your own money tied up (because you paid cash for all your meals too). I'd much rather toss that all on a card and pay it the minute I get reimbursed than to pay it out up front, taking money from savings to cover it and losing the interest I'd be earning on it.
Or, like I said, when I was doing my bathroom and had the cash to pay for everything but put it on my Lowe's Visa so that I got $40 back to buy more of the things I needed. I paid it off before I even got the bill. I know people at work who used a credit card to pay for day care that was being reimbursed through their FSA dependent care account. They got massive frequent flier miles doing that and never paid a dime in interest.
Bottom line is.. you can't succumb to the temptation to use for anything you don't have the cash to pay for. Too many people can't do that. You have to know yourself and your own limits.
All that said, hypo and I have been discussing her getting a student card in case of real emergencies with her several states away and no convenient way to get her money. For years she has had a VisaBuxx teen card which is like a secure card that I could put funds on right from my checking account. The bank we have her VisaBuxx card from is no longer going to participate in the program so we have to find a new option. Her having that card has been wonderful for us because I could put cash on it and she could go school clothes shopping, buy gas, pick up groceries for me, etc. I could transfer money to it online and it was immediately available to her. There was no annual fee but there was a $2.00 fee each time I put cash on it, so we tried to anticipate her needs in advance and put exactly what we needed on it. I felt better about her having that than carrying a bunch of cash around with her. She used it when she went to Europe and I could monitor how she was spending her money and whether she would need more. It was great when she was in NYC last summer and she could use it for her baggage fees and taxi's to and from the airport without carrying huge amounts of cash. We loved that card and I'm sad that it's going away!
|